White House touts phase one of China trade deal: 'This is historic'
Director of the National Economic Council Larry Kudlow explains phase one of the China trade deal on 'America's Newsroom' and says the administration will move 'immediately' to phase two.
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
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. The White House and Senate leaders reached a deal early Wednesday morning on a massive stimulus package they hope will keep the nation from falling into a deep recession because of the coronavirus crisis.
The revamped Senate proposal will inject approximately $2 trillion into the economy, providing tax rebates, four months expanded unemployment benefits and a slew of business tax-relief provisions aimed at shoring up individual, family and business finances.
The deal includes $500 billion for a major corporate liquidity program through the Federal Reserve, $367 billion for a small business loan program, $100 billion for hospitals and $150 billion for state and local governments.
It will also give a one-time check of $1,200 to Americans who make up to $75,000. Individuals with no or little tax liability would receive the same amount, unlike the initial GOP proposal that would have given them a minimum of $600.
The agreement caps five days of intense negotiations that started Friday morning when Senate Majority Leader Mitch McConnell (R-Ky.) convened Republican and Democratic colleagues, with talks stretching late into the evening each of the following four days.
"At last we have a deal. ... the Senate has reached a bipartisan agreement," McConnell said during a speech on the Senate floor after 1:30 a.m. on Wednesday, pledging that the Senate would pass the package later in the day.
Senate Democratic Leader Chuck Schumer (N.Y.) hailed the legislation as "the largest rescue package in American history."
You can After Hours catches up with Chanel Rion -- the Chief White House Correspondent for One America News -- to talk about the latest developments taking place at the White House. Vice President Pence and the coronavirus task force hold a briefing at the White House amid the spread of coronavirus across the United States.
NEGOTIATOR SENDING PHASE ONE NEXT DOOR AT THE WHITE HOUSE. YOU'LL SEE IT LIVE WHEN IT HAPPENS. CHINA PROMISING TO BUY MORE AMERICAN PRODUCTS WITH AN ADDITIONAL $200 BILLION OVER THE NEXT TWO YEARS. SPEED IN EXCHANGE, THE U.S. WILL EASE SOME TARIFFS WHILE LEAVING OTHERS IN PLACE WHILE THEY SIGN OFF ON PHASE TWO. LET'S GO TO OUR HEADLINER, LARRY KUDLOW, DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL. THANK YOU FOR BEING HERE ON "AMERICA'S NEWSROOM." >> GOOD MORNING, THANKS TO BOTH OF YOU. I'M SORRY WERE BREAKING UP, BUT I'M SURE YOU WILL STILL BE FRIENDS. [LAUGHTER] >> Bill: INDEED WE SHALL. >> Sandra: HOW WILL AMERICANS BE BETTER OFF AFTER THIS IS SIGNED THIS MORNING? PHASE ONE OF THE CHINA TRADE DEAL? SPEAK AT ONE THE KEY POINTS BESIDES UNLAWFUL TRADING PRACTICE, WE WILL ASK FOR. WE WILL SELL TO CHINA A TON OF GOODS AND SERVICES AND MANUFACTURERS AND ENERGY AND FARM COMMODITIES. THE OVERALL BALLPARK NUMBER IS $200 BILLION IN EACH OF THE NEXT TWO YEARS. WE ARE THE MOST COMPETITIVE ECONOMY IN THE WORLD. THE PRESIDENT HAS WORKED HARD TO DEFEND THE AMERICAN ECONOMY AND THE AMERICAN WORKER FROM INJUSTICES. THIS IS A ONE-TIME, HISTORIC, NEVER-HAPPENED-BEFORE TRADE DEAL. IT WILL BENEFIT INCOMES, INDIVIDUAL AREAS, BAG AND MANUFACTURING AND FINANCIAL SERVICES AND TECHNOLOGY, AND IT'S GOING TO HELP GROW OUR ECONOMY FASTER. WE RECKON IN 2020 AND 2021, AT LEAST HALF A POINT OF ADDITIONAL GDP, WHICH WILL PROBABLY TRANSLATE INTO, WHAT, ANOTHER MILLION JOBS ON TOP OF WHAT WE'VE ALREADY GOT? >> Bill: JUST TO LET YOU KNOW, WE GET INTERRUPTED BY SPEAKER PELOSI, SO PLEASE UNDERSTAND THAT. >> AND PROMOTING AND DUMB LIKE TREATING A GROWTH AND PROSPERITY, SHE'S PROMOTING SOMETHING ELSE. BUT I UNDERSTAND YOU HAVE DUTIES. >> Bill: THANK YOU FOR THAT. WE LOOK FORWARD TO SEE WHAT IS HAPPENING NEXT SUMMER. WHAT THEN, LARRY, HIS LOVE TO BE DONE? HOW BIG OF A HILL IS THAT? >> TWO THINGS REAL QUICK. NUMBER ONE, THE BIGGEST HILL WAS GETTING PHASE ONE. WHICH HAS NEVER BEEN DONE BEFOR BEFORE. THE PRESIDENT'S LEADERSHIP INCLUDING THE TARIFFS, THE WORK OF BOB LIGHTHIZER, STEVE MNUCHIN, OUR HOLE TRADE PRINCIPAL'S TEAM. DONE BEFORE TO YOUR QUESTION, WE MOVE INTO PHASE TWO IMMEDIATELY. THE PRESIDENT WILL BE SPEAKING WITH THE VICE PRESIDENT AND OTHERS TO ANNOUNCE THAT. I WOULD SAY TO YOU PROBABLY THE TOUGHEST NUT TO CRACK IN PHASE TWO WILL BE TO REALLY LEVEL THE PLAYING FIELD AND TAKE CARE OF UNFAIR PRACTICES, REGARDING FORCED TRANSFERS OF TECHNOLOGY. IT'S A LITERAL PROPERTY, THAT'S AMERICA'S CREATIVITY. THAT'S OUR FREEDOM TO PRODUCE AND INVENT. WE HAVE THE GREATEST IN THE WORLD. THEY'RE REALLY STRONG STRICTURES AND CHANGES IN PHASE ONE, INCLUDING CHANGING CHINESE CRIMINAL PENALTIES. WHICH IS A HUGE THING. CIVIL AND CRIMINAL PROCEDURES WILL BE CHANGED. THAT'S A BIG PART OF THEIR REMEDY AND A BIG CHANGE FOR THAT WILL STILL LEAVE US, HOWEVER, WITH ISSUES ON WHETHER THE GOVERNMENT GIVES LICENSES TO AMERICAN COMPANIES WITHOUT TRYING TO STEAL OUR TECHNOLOGY OR FORCING TECHNOLOGY TRANSFERS. STATE SUBSIDIES TO STATE RUN BUSINESSES AND SO FORTH, WHICH HAS BEEN VERY UNFAIR, AND OTHER ISSUES AROUND THAT. THE LICENSING AND SUBSIDIES WILL COME IN PHASE TWO. AND THE UNLAWFUL FORCED TRANSFER OF TECHNOLOGY. THAT WILL BE TOUGH. IT MAY BE DOABLE, WE'VE COME -- I THINK WE'VE GOT ALMOST HALF OF WHAT WE ASKED FOR IT ORIGINALLY IN PHASE ONE. SO I REMAIN OPTIMISTIC THAT THIS DEAL TODAY, BILL, SHOWS -- AND THIS CAME UP, WE HAVE DINNER WITH THE TWO TEAMS LAST NIGHT, A SMALL DINNER -- U.S. CHINA COOPERATION IS POSSIBLE. IT IS POSSIBLE. BUT HER BALANCE, RELATIONSHIPS, TREATED IN THE ECONOMY, IT'S POSSIBLE. OF COURSE, JUST IN CASE, WE HAVE VERY STRONG ENFORCEMENT PROVISIONS. IF COMPANIES ARE NOT SATISFIED AND REMEDIES NOT TAKEN, WE WILL TAKE PROPORTIONATE ACTIONS. >> Sandra: THERE'S A DEBATE OVER WHAT THE ACTUAL IMPACT OF PHASE ONE WILL BE ON THE AMERICAN ECONOMY. DEMOCRATS, THE DNC PUT OUT, "ONE NEW LATER FARMERS ARE WAITING FOR THE CHINESE PURCHASES JUMP ON THIS. THEY STILL HAVE QUESTIONS FOR WHAT THIS MEANS FOR AMERICA'S FARMERS." THERE'S ALSO A DEBATE OVER WHAT THIS MEANS FOR MANUFACTURING IN 2020. THAT'S ONE OF THE HOLDOUTS AS FAR AS THE PRUDENCE IN THE ECONOMY. WAS NOT THERE IN 2019. HOW CONFIDENT ARE YOU MANUFACTURING WILL RETURN IN 2020, AND WHAT DOES IT MEAN FOR AMERICA'S FARMERS? >> I'M INCREASINGLY OPTIMISTIC THAT THESE PURCHASES AND EXPORTS WILL COME THROUGH. THIS WAS THE HEART, THE HEAT OF THE NEGOTIATIONS, ALONG WITH IP THEFT. GOSH, I HATE TO SEE PARTISAN ANKLE BITING HERE. I KNOW SO MANY DEMOCRATS, DEMOCRAT FRIENDS OF MINE, MEMBERS, ECONOMISTS, HAVE REALLY WANTED THIS DEAL AND AGREED WITH PRESIDENT TRUMP, WHO HAS CHANGE THE NARRATIVE ON CHINA'S UNFAIR TRADING PRACTICES TO SOMETHING MORE REALISTIC TO DEFEND AMERICAN INTERESTS. SO I HATE TO SEE THIS. THE DEAL IS BEING SIGNED. THE NUMBERS ARE CLEAR, SANDRA. YOU'VE GOT $40 BILLION TO $50 BILLION INCREASE IN FARMING THIS YEAR. MANUFACTURING, WE HAVEN'T GIVEN ENOUGH CREDIT TO THAT. $75 BILLION IN ADDITIONAL AMERICAN EXPORTS WILL BE IMPORTED BY CHINA. SERVICES COME $40 BILLION. A LOT OF THAT IS FINANCIAL. AND THAT ENERGY, WE ARE THE STRONGEST ENERGY POWER IN THE WORLD TODAY. AS THE PRESIDENT SAID, WE DON'T NEED MIDDLE EAST OIL. CHINA NEEDS ARE NATURAL GAS, THEY NEED OUR LNG, THEY NEED OUR COAL. $50 BILLION OF ENERGY EXPORTS. >> Bill: NO SMALL MATTER. A MOMENT AGO YOU SAID YOU'VE GOT 50% OR ABOUT HALF OF WHAT YOU'RE LOOKING FOR IN PHASE ONE. DOES THAT MEAN CHINA GOT THE OTHER HALF? WAS THAT, TO BORROW A PHRASE, THE ART OF THIS DEAL FOR PHASE ONE? >> NO, I WOULDN'T PUT IT THAT WAY. NUMBER ONE, IF YOU LOOK AT THE COMMENTARY COMING OUT OF THE CHINESE MEDIA ORGANIZATIONS, THEY ARE SAYING, "LOOK, THEY DIDN'T LOSE THE DEAL, THEY KNEW THE DEAL TO IMPROVE THEIR CONSUMER. THEIR ECONOMY HAS BEEN VERY SOFT. OUR TARIFFS HAVE HURT THEM ENORMOUSLY, AND OTHER FACTORS. THEY NEED IT, THEY WANT THE AMERICAN GOODS AND SERVICES TO HELP CHINESE ECONOMY AND THE CHINESE CONSUMER. IN THAT ISSUE OF 40% TO 50%, NO, WE DIDN'T LOSE. WE DIDN'T COMPLETE. IN OTHER WORDS WE GOT THROUGH PROBABLY -- AND BALLPARK NUMBERS, BILL, WE GOT THROUGH ABOUT HALF OF WHAT WE WANTED. WHICH IS HALF MORE THAN ANYBODY THOUGHT A YEAR AGO. MORE, FRANKLY, THAN ANYBODY THOUGHT IN PHASE ONE. IT'S A TREMENDOUS -- AGAIN, THIS HAS NEVER HAPPENED BEFORE. NO TRADE AGREEMENT LIKE THIS IN HISTORY OF U.S. CHINA RELATIONS. LET'S CALL THE OTHER HALF IS FOR ARGUMENTS SAKE, ROUND NUMBERS. THAT IS LEFT TO BE DEALT WITH IN PHASE TWO. WE WILL GET RIGHT AT IT. AS SOON AS THE AGREEMENT IS SIGNED TODAY, PHASE TWO BEGINS. >> Sandra: THAT'S GOOD BIG PICTURE AND TALK ABOUT THE U.S. DEFICIT TOPPING A TRILLION DOLLARS, THE HEADLIGHTS THIS MORNING 2019, THE FIRST TIME IN SEVEN YEARS. THE PRESIDENT PROMISED TO BRING THAT DOWN, THE CORPORATE TAX, AGGRESSIVE DEREGULATION. WHAT'S GOING TO HAPPEN IN 2020 BUT THAT? WHAT IS THE PRESIDENT DOING TO BRING THAT DOWN? >> REVENUES ARE RISING. WE PROBABLY DO SPEND TOO MUCH. WE'VE MADE OUR DEALS WITH CONGRESS, BUT WE ARE TALKING ABOUT -- I'M GOING TO SAY, SANDRA, 5% OF GDP DEFICITS. I THINK THAT'S VERY MANAGEABLE AND ECONOMY THAT IS TRANSITIONING INTO FASTER GROWTH. WE FED THREE YEARS, PRESIDENT TRUMP'S POLICIES HAVE LOWERED TAXES AND REGULATIONS AND TRADE REFORM. WE DIDN'T QUITE GET A 3%, WE GOT HURT BY THE BOEING SHUT DOWN, BY THE WAY. IT PROBABLY COST US HALF A POINT. I'M JUST SAYING IN A GROWING ECONOMY DEFICITS AROUND 5% OF GDP ARE QUITE MANAGEABLE. SPENDING AT 21% GDP IS QUITE MANAGEABLE.