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The Tucker Carlson Show
Bob Lighthizer: Why Trump's Tariffs are the Only Way to Save the Middle Class
01:39:40
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- [00:01]
Tucker Carlson
Thank you for coming on to explain this. I mean, my one frustration, I believe in what the White House is doing. I don't think enough Americans understand it, so I don't think there's anyone better at explaining it than you. I mean, you're the trade representative. What about our current system needs to be changed? Why is it important to do this, to institute tariffs, to rethink trade?
- [00:48]
Robert Lighthizer
So. So that's the fundamental question, Tucker. And thank you for having me on. It's a pleasure to be here. Been a fan for a long time. So I think you have to start with a proposition. Has the system failed? And to me, it's an emphatic yes. I think of it in sort of two ways. One, if you think of the way trade is supposed to work, you're supposed to export in order to import, and then you get the benefit of trade. You get actually, you do what you do best, I do what I do best or I do what you do less best.
- [01:27]
Tucker Carlson
Right.
- [01:27]
Robert Lighthizer
You export, we import, and we get the benefit. We both have higher standards of living. That's not really what it's evolved to. It's evolved to now where you have a few countries, the United States being the biggest, that have an open capital system and an open trading system, and other countries have an industrial policy that is designed not to increase the standard of living of their. Of their citizens, but to gain wealth. So what they're trying to do is get wealth in order to get assets in the United States or to get technology in order to get all these kind of things that make you wealthy. So I think of the kind of failure points as being one, because this system doesn't work. We have this giant transfer of wealth from the United States overseas, and that is in the form of. Of trade deficits and the way the system is supposed to work. No one should have large trade deficits for long periods of time. Things can happen. You can do it. You could have trade deficits with one country, surplus with another. But the notion of a country having hundreds of billions of dollars of trade deficits every year is not how it's supposed to work. We now are to the point where our trade deficits, they calculate them at about 7 or 8, $100 billion. If you did it the way you or I would do in a sensible way, you'd probably be at a trillion or a trillion and a quarter dollars. So that's a transfer of wealth from Americans overseas in return for current consumption. And it has nothing to do with economics. It's entirely the result of industrial policy, of other people and our being defenseless. So you ask yourself, what does that mean over a period of time? Why should I worry about that? There's a data point called the international investment position of a country. And that is how much for us all Americans own throughout the entire world versus how much everyone else owns here. That number is a negative $23.5 trillion. And if you said, what was it 20 years ago? It was probably a negative $3 trillion. So we have transferred about $20 trillion worth of our national wealth. And I would say the future income of that wealth oversees in return for current consumption.
- [03:54]
Tucker Carlson
Can you explain that measurement one more time? It's what we own here versus what others own here.
- [04:01]
Robert Lighthizer
No. So it's how much Americans own overseas. Okay, all over the world versus how much everybody else in the world owns here. And it's a real calculation. It's not something I did. Right. It's a real statistic. It's been around forever.
- [04:17]
Tucker Carlson
And what would that include that they own here?
- [04:23]
Robert Lighthizer
So they own 23 and a half trillion dollars worth of stuff. But if you said, what is it mostly? It's probably mostly debt. A lot of it's debt. A lot of it is equity in our companies, real estate. Those are the principal things that they own. Those are the big assets. Debt is a big one. But also ownership and equity. A lot of it portfolio. Now, some of it is foreign direct investment, where country actually comes in and buys piece of land and creates jobs. But most of it isn't that. Most of it is just they own US equities. If you think about the United States, for most of our history, particularly since the Second World War, we Americans were thought rich because we own more overseas than people owned in America. That's what makes you rich. Now we are poor to the extent of $23.5 trillion. Now this point is an interesting one. In 2003, Warren Buffett did an article on this point and he was worried about the trade deficit because it was leading to a negative net international investment position of Americans. And it was basically transferring. Well, the same thing I am. When he was worried about in 2003, the number was a negative $2.3 trillion. So since he sort of raised the red flag on this and said we've got to get back to balanced trade, the situation has gotten geometrically wor. That's the first condemnation of the current system, and we can talk at great length about that if you like. The second is this system has really slowed economic growth in the United States. So let me give you a point here. If you think from the 1960 to 1980 and then 1980 to 2000 and 2000 to the present, think in those three increments, from 1960 to 1980 we had 14 years of plus 3% GDP growth. All right, reasonable GDP growth. From 1980 to 2000 again, we had 14 years of plus GDP growth. Since 2000 to now we have had three years. And one of those was Covid, which doesn't really count. So the last time we had plus 3% GDP growth was 18 or 19 years ago. And that coincides with this period of uber, some would say hyper globalization, hyper free trade that came on largely in the 1990s. So we've seen the transfer of wealth overseas. We're getting poorer. We have seen American have slower economic growth. We've also seen a deterioration of our technology, of our technological lead. And there's a number of way to think about this one.
- [07:28]
Tucker Carlson
Can I just ask you a question? We've also seen like a lot of the world's population move here. Like the country's completely changed from 2000.
- [07:35]
Robert Lighthizer
Well, but yeah, but the demographics is interesting point. And I agree with what Vice President Mance talked about the other day about how one of the things about immigration is it does get you dependent on low wages. And when you depend on low wages, it tends to stifle innovation. But I make so I agree with that, but I'm making a little different point. If you think when you lose manufacturing and you lose manufacturing jobs, you also it slows down your innovation. There was this notion that, well, we'll innovate and others will manufacture, but it doesn't work that way. Most of the innovation is near the point of manufacturing. So what are my data points to suggest that we are falling behind? All right, first is we invented the personal computer. Now we make almost none and none without foreign parts. We invented the semiconductor. We make now 8% of the global amount. We used to dominate it. We could say the same thing about rare earths. We didn't invent, but we used to dominate that. Solar panels, we could go through all of these various things, nuclear energy, all of these things where we have lost, not only lost our lead, basically fallen out of the competition, but very importantly the Australian Strategic Policy Institute, which is this wonderful institute that's supported by the government of Australia, but also private sector people. They track 64, what they call critical technologies. 64. The United States is behind China in 57 of the 64. And these are things like AI and robotics and the kind of things you need. And if you said, well, where were we 15 years ago? We were behind in three. So you've seen this deterioration during this period of hyper globalization or hyper free trade or huge trade deficits. You've seen us actually fall behind technologically. But the fourth and by far most important ramification of this process is we've seen a real deterioration in the quality of life of our working class people. Right?
- [09:42]
Tucker Carlson
Yes.
- [09:43]
Robert Lighthizer
So The United States, 2/3 of American workers have a high school education. Only two thirds. So it's not like we're talking about some fringe group on the side. This is the heart of who we are. We have seen these people lose their jobs. We've seen their wages stagnant for 25 years. There was a bump in trade in Trump one, but we're basically back where we were. You've seen them actually have shorter lives. Angus Deaton and Ann Case did a book called Deaths of Despair that demonstrated that these people now live on average about eight years shorter lives because of alcohol and drugs and suicide. To give you an idea, when I was young that differential was probably about a year. And now it's eight years. We've seen they are poorer, we've seen despair increase, we've seen devastation. You don't have to drive very far in America to see devastated communities. All of this the result of this failed attempt at globalization, this failed attempt at free trade. And another aspect of it is we have seen not only are workers been treated very badly, but the distribution of wealth in America has gone just like this. One of the great things about America for me, particularly growing up, but I mean I, even you, you're younger was this notion that we're all middle class now. We weren't always really met, we thought.
- [11:10]
Tucker Carlson
Of ourselves, we definitely pretended it for sure.
- [11:13]
Robert Lighthizer
The, the very, very rich would, you know, they were them and nobody cared about them. And then they're very, very poor people. Sorry for. But, but Most, you know, 80% of us thought were middle class and I went to Catholic schools and we had people with, with, with nobody that was really rich because. Asheville, Ohio but, but, but there were people who were relatively well off, people who weren't and there wasn't any big difference.
- [11:33]
Tucker Carlson
But they all at, they all ate.
- [11:35]
Robert Lighthizer
Denims, they all went to the same clubs, they all played Little League together. They all thought of themselves as having about the same chance of success, which is an important point. Now what we have for the first time in American history, the top 1% has more wealth than the middle 60%. It's never happened before. We find kind of combining these thoughts and we get this from Angus Deaton, we find for the first time, starting in 2000, when this explosion took place in hyper globalization, we find that American children can no longer expect to live longer than, and be richer than their parents. That was what we all thought. We're going to be better off than our parents and we're going to live longer. That is no longer true. So, and I, and I could go through one data point after another. If you look when I was in high school, the top 1% had about 30 times as much wealth as the person in the middle. Now it's 72 times as much wealth.
- [12:43]
Tucker Carlson
So this seems like a recipe for social instability and ultimately for revolution. That's what happens in other countries.
- [12:49]
Robert Lighthizer
Absolutely no question. We have this sense that we're immune. I don't agree with that. And this, these crises that I've talked about, this transfer of wealth, the technology, the slow economic growth, but mostly the effect on our working people, that is why Reagan was elected, very beginning of this. And we can talk history of that. And it absolutely is why Donald Trump was elected president. Reagan had these so called Reagan Democrats that we all remember that that was the beginning of those people because that was when we sort of reached the peak. By the time we got to the 2000s, these people were a movement, this populist movement. And they are the reason that Donald Trump is where he is. And to his credit, Donald Trump talked about this and worried about this issue since he was 35 years old. This is not, this is the, in my opinion, the essence of Donald Trump, Donald Trump's essence is we're getting, he says we're getting ripped off. Our, our workers are getting screwed. It's not because they're lazy or stupid. It's because we have a bad system that is hurting them and it's destabilizing the country. And all of these are data points that kind of make that point. And once you realize that, you realize you have to do something right. The purpose of the economy, first of all obviously is national security. But after that it's to distribute resources and wealth so the most Americans live the best lives they can live. And we have lost that. We have just lost.
- [14:25]
Tucker Carlson
It hasn't been an accident. It doesn't feel necessarily like we've evolved into this. It feels like we've been guided into this, that this is a result of calculations and an ideology that still exists most prominently in the pages of the Wall Street Journal, which let me just say, is a disgusting, dishonest newspaper. But even if you like the Wall Street Journal, they have a very kind of clear ideology, which they've promoted, along with almost everybody in Washington, that free trade is the path to prosperity. And then in fact, it's like a moral imperative. Like, if there's something dirty about abandoning free trade, what is that? Obviously, you know a lot about this since you've lived in Washington a long time.
- [15:07]
Robert Lighthizer
So I would say, first of all, that I say the Wall Street Journal, they have editorialized against me, my by name, more than 30 times.
- [15:20]
Tucker Carlson
Oh, me too.
- [15:20]
Robert Lighthizer
Yeah. So. So. Well, we have that in common too. I say they have the diversity. The editorial page has the diversity of opinion protocol of somewhere between prob to and the People's Daily.
- [15:33]
Tucker Carlson
Yeah.
- [15:34]
Robert Lighthizer
It is their view and they keep it. So. So, you know, why did we get to this stage? To some extent, it was kind of misguided. To some extent, it was wealthy people pushing it because it was good for them. I'm not one who subscribes to the view that it was people trying to hurt America. I think it was. They just didn't care one way or another whether it hurt. They didn't care, for example, who owned America. They didn't care what percentage of our global wealth ended up in the hands of our working people. Those were not metrics. What they cared about was price optimization and how much we could consume. And that's the opposite of what people like you and I believe in conservatives and a lot of labor Democrats believe we have to worry about values and preserving what's great in America. We're not interested in sort of the materialism of optimizing prices and maximizing consumption. And that's more or less where that's. There's a combination of that. There's a combination of this financialization of America, of taking profit out right away so that a few people get very rich regardless of the effect on others. If you think of the evolution, Tucker, it's, It's. And we could talk, you know, from the beginning of time about trade and how it evolved, but for our purposes, you would think of it basically as America really from. From the. The early 1800s, basically became wealthier and wealthier largely behind the American system. And Alexander Hamilton, kind of an idea of tariffs and subsidies, subsidies in the nation, in the nature of canals and roads and the like. But tariffs were a key part. By. By 1870, we. We. We had started to turn surpluses. By 1890, we're the richest country in the world, all right, and it kind of progresses like that. Now we can talk about that back and forth. And those were almost all Republican presidents during that entire, probably two Democrats during that entire period between Lincoln and Franklin Roosevelt. And basically tariffs were a key tool. And there were ups and downs in that. And we can talk about that if people are interested. But we got to the Second World War. War. And then we had a different challenge. We had to rebuild Europe. We wanted to rebuild Japan for stability. We wanted to fight communism in the Soviet Union. These were our motivations. And so at that point we needed a new system and they developed this new trading system. And the trading system was sort of based on the notion of we'll all reduce barriers, we'll all do better over a period of time. I would say that was a. At times it was a successful idea. At times it wasn't a successful idea. But, but by the time we got a few several decades into it, we started seeing people being more and more industrial policy and, and, and by the 1970s into the night, late 1970s, we started to see our situation get worse. We started having trade deficits. You'll recall that Nixon in 1971 put tariffs on the whole world in order to decouple from gold. And we can talk about that if people are interested. But there were a lot of things that were sort of signals, and that was kind of the peak. By the time we got to Ronald Reagan, as I say, there was already a loss of a lot of jobs. There was an unsettling among our working class people, which, as I say, unlike a lot of places, it is us. It's 70, 65, 70% of it. It is us. And then you found yourself, the Berlin Wall fell. There was this notion of the end of history, that for now on, everything is going to be better and we're all going to be democracies and we're all going to have open markets and there's all this greatness.
- [19:36]
Tucker Carlson
You can remember Frank Fukuyama and other morons.
- [19:40]
Robert Lighthizer
Yeah, yeah, they're right. So then you found yourself with Clinton in the 90s, the end of Bush. It's not because I don't want to be totally parsing the end of, of Bush 41, Herbert Walker Bush and then into Clinton. And we have what I call the, like the trifecta of stupid. All right, we do nafta, we do the wto, the Uruguay around that. And then the dumbest of them all, we give most favored nation treatment to China. And those things are done more or less in the times of about 10 years.
- [20:12]
Tucker Carlson
So Clinton for the most favored nation status. That was something that Clinton worked. Clinton set it up, but Bush signed it.
- [20:20]
Robert Lighthizer
Is that correct? Now, it passed under Clinton. So this is an interesting fact. In 1997, I did an article for the New York Times, and you'll recall during the second Clinton election, there was this talk about Indonesian money came into the Clinton.
- [20:42]
Tucker Carlson
I remember very well. Yeah, well, something or other.
- [20:46]
Robert Lighthizer
Exactly.
- [20:47]
Tucker Carlson
Yeah. Yeah.
- [20:48]
Robert Lighthizer
I, I did an article which the New York Times published. It sort of said, well, what's this about? This is not Indonesian money, it's Chinese money. What does China want? They want most favored nation treatment, and they want to get into the wto. And if they do, there won't be an American job that's safe. So this is in 1997. Fast forward, you have this vote. Clinton is pushing it, by the way. It passes with more Republicans than the Democrats. Republicans are worse on this at that time. A lot of them kind of learned. Yeah, ye. And then we have these things passing. So we have this trifecta of stupid, as I call it. And then we have 5 million manufacturing jobs lost. You just see jobs lost. Wages are basically not going up in real terms since then. You know, the richer and the poor get poorer. And a lot of these very bad outcomes for working people, I would say for the country generally, you can say came at that time. Now, if you say, what is the system deteriorating before then? For sure it was, but this was like somebody just putting it on steroids and acted like. I mean, the only thing that they missed about the evolution of economics was human nature. Right. Other thing else they got right, they just missed human nature, as always. Yeah, so. So then you saw very bad things happen over. Over a long period of time. You got to the point where you had a 2016, you'd have President Trump, as I say at that point, have been complaining about this general notion since he was 35, since he was a kid, and he kind of gets the populist move and he's elected. And then we have whatever happened in 2020 a Covid thing that ends up affecting our election. And now we are again because we changed in Trump 1.1.0 or whatever that computer people say. We changed the way people think about these things. And they didn't really change back much in Biden. To Biden's credit. I think some of his people were very good, but overall, they didn't make a lot of decisions to make better what we did, but they didn't make it worse. And now we're in Trump, where we're in a position to actually make substantial changes. And I know that's what you want me on here to talk about. But the most fundamental thing is the system has failed America generally, and it's failed our working people dramatically. And that's been going on for, in an acute state for at least 25 years.
- [23:23]
Tucker Carlson
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- [24:58]
Robert Lighthizer
We are the only G7 country that has a life expectancy of under 80 years. And supposedly we're the richest country in the world. Supposedly. Now, there's a lot of things contributing to that. Everyone sees it all their own way, and there's a lot of things contributing to it. But.
- [25:18]
Tucker Carlson
But it's an emergency.
- [25:20]
Robert Lighthizer
It's an absolute crisis. And I'm telling you, this divergence between this income inequality is another real, real emergency.
- [25:31]
Tucker Carlson
I Couldn't agree more.
- [25:31]
Robert Lighthizer
It changes the kind of country we live in. It's not the kind of country, I don't care whether you're well off or not. It's not the kind of country you want your children living in. It's not America. And we have to do something about it. And this is, I believe this is the motivation for Donald Trump. This is the motivation for the people in his administration who are informed on these issues. Some of them obviously deal with other kinds of issues.
- [25:58]
Tucker Carlson
It's bad for everybody. It's actually bad for the rich as well as the poor. When you have a stratified class system like we're getting, which didn't exist, by the way, spend three weeks in Australia, which is a country with a lot of problems, but it's still a middle class country. And you can feel it in the way people talk to each other, in their attitudes. We're all sort of in this together. You know, you do not get that sense in a pyramid shaped social structure at all. And that's the biggest change of my lifetime, is the end of the middle class as a majority and the end of the egalitarian spirit that defined America, that Anglo egalitarianism, which is not a feature of other countries. So, no, I couldn't, I couldn't agree more. It makes me hate the people in charge for ignoring this stuff. So what do you do about it?
- [26:43]
Robert Lighthizer
So the first thing you do is you acknowledge you have a problem. Second thing you do is you put your finger, what is the nature of the problem? The problem is industrial policies of other people. Now, this is a really important point, Tucker. The president and some others will say the tariffs are different. They're ripping us off on tariffs. And for sure that's true. But in terms of what is causing the harm to the global economy, I would say, but particularly to America, the most important thing is not tariffs. Tariffs are the most visual thing, the most, the easiest to see. But the real problem goes far deeper than that. So that if you end up with equal tariffs, you will still have a catastrophe for America. It will not resolve the issue at all. So what are the things in industrial policy that tilt the scale against? We would say open markets and free trade and fair competition. All right, they are everything from the banking system. So in China, they have a banking system, they tell you to put your money in the bank, they make you have low interest rates. They take the money, they can loan it to manufacturing at what we would consider to be a below market rate. And that encourages manufacturing and They've done that. They've increased that those loans from $60 billion a few years ago, this is according to the New York times to almost $700 billion in the last year or so. But for a year. So it's the labor system. If you have a system that keeps labor from getting its fair share of the pie, you're keeping wages down because of the statutory system. An example of that is this hookoo system in, in China where you can't really move around and be part of the system and get wages just kind of stay where you were born. But, but there are lots of other ones. Not allowing unions, not allowing organization, not, I mean a lot. There's a lot of, in the labor law, but it's, it's, it's subsidies, it's denying market access. It's fake non scientific standards to get products. It's value added tax. It's a tax.
- [28:59]
Tucker Carlson
And explain that a little more fake standards.
- [29:02]
Robert Lighthizer
So, so, so it's one of the big things we have. Fake is a. See that just shows you that I'm a Trump person, right? So a person, a more sensible person than me would say non scientific sort of standards. So I mean you could take a case as a simple case that how long should a tractor have to break before it stops? And you could say okay, fine, you know, safety is, these are making these numbers up. Safety is 40ft. And maybe the Europeans would say well it's got to be 10ft. We have to be very safe. And the net of that would be to eliminate products coming in that kind of a standard or health and safety. For example, the European saying chicken shouldn't come in if you chlorinated. That is to say when you're done, you put chlorine on it to make sure there's no, no micro organisms. They would say well that's unsafe. So it's sort of non scientific standards like that. And there's a lot of them which.
- [30:02]
Tucker Carlson
Are in effect trade barriers.
- [30:03]
Robert Lighthizer
They're absolutely trade. Everything I'm talking about either basically shifts national wealth from consumers to manufacturers to give them an edge. And the tax system, currency manipulation, there's all these things. These things are. The point I'm trying to make is, are multiples in terms of importance versus tariffs. If we have equal tariffs with everyone in the world at zero, for example, we won't have a middle class, we won't have manufacturing because all these other factors will give them this unfair uneconomic advantage. And we can go through. And the President, to his credit in his truth where he laid this out, he said, it's not just tariffs, it's all these other things. Jameson Greer, the USTR is looking at all these other things. But when we think of the kind of migration, for me, let me just say was like, okay, we need free trade. And then you said, okay, we need fair trade. The reality is you can't get fair trade because there's too many ways to twist it. What we really need, I've evolved to is balanced trade. We need a system that enforces kind of trade balance not with countries, but globally. Countries shouldn't be able to be huge surplus countries year after year, like China, of course, being the worst example. But also Germany, Ireland is evolving to that and there's a bunch of other countries we could talk about. Countries shouldn't be able to do that. And so you say, well, how do you achieve that? You really need to put in place, I would say, some kind of tariffs to offset this fundamental unfairness. You're not just offsetting their tariffs. Europe's 10% on autos, we're doing absent. If Europe went to zero, we still wouldn't sell very many cars in Europe. We just wouldn't. Our companies basically make small trucks. They don't need them there. I mean, it's just, there's a lot of reasons why that wouldn't happen. But what you need, you can't have countries have huge trade surpluses over long periods of time. You have to enforce and you have to penalize countries that have surpluses all the time and let countries that have deficits all the time get back to balance. If you do that, you then get the benefits of trade. So how do you get to balance trade? There's, there's, there's basically three ways you can get to balance trade. One is the way that, that Warren Buffett talked about in this, this, in this article, and it's a wonderful article. I recommend anyone to read it. I would just Google Warren Buffett Squanderville, because he talked about Squanderville and Thriftville. And it's a short article. It's very nice.
- [32:45]
Tucker Carlson
2003.
- [32:46]
Robert Lighthizer
Yeah, it was 2003. And, and, and he says what we should do is, is have export import certificates. So in order to import unit export certificates, so you want to bring in T shirts, you go to a steel mill and say, okay, fine, I'm going to, you export it, I'm going to buy that. And that would get you to balance, and I would certainly support that. Another way you could do it is you could put and this is a little more complicated. You could put a tax on the money that comes back this $23.5 trillion. This trillion dollars. So that comes back every year where they buy US Assets. You could tax that. So that really wasn't worth a dollar. It was only worth 80 cents. In that case, there would be less incentive for people to run up these zero buses. That's called a capital access fee. And there are people that will propose that. And that also would work. And then there's tariffs. So I prefer tariffs. One, because people understand them. Two, every country in the world has a system set up to deal with tariffs. Right now they all have the legality, they all have the process of, of how to do it. They're. Three, they're, they're, they're flexible. You know, you can move them around based on need to get to your objective of balance. But any three of those things would work. And, and I just, I just think, and obviously the President thinks that tariffs are the simplest, easiest, most understood way to kind of do it. And the objective has to be to offset all unfairness and to get, move towards, over a period of time, move towards balance and ultimately have balanced trade. If you had balanced trade, you'd have another trillion dollars worth of domestic gdp, right. I mean, it would be a huge boom and most of it would be, or a lot of it would be in manufacturing and things spun off by manufacturing. And that's what the President is trying to do. He's trying to get us to use tariffs to move towards balance, to get a better distribution of wealth within our country so that working people end up with a higher percentage of the wealth. And we have this economic boom that's going to come by from, from reducing that, that, that, that huge perennial trade deficit.
- [34:56]
Tucker Carlson
I think a lot of people, some people anyway, in Washington for sure, have given up on the idea that America can be a manufacturing power once again.
- [35:06]
Robert Lighthizer
So I think that's, you know, I think that's fundamentally wrong. So the first thing they would say is manufacturing doesn't matter. People still say that. Oh, there are people. Yeah.
- [35:17]
Tucker Carlson
Outside of AI or no.
- [35:19]
Robert Lighthizer
Well, you'd have to. You're in a pretty small group of people that have everything in common except sense. So this is a view we people who think like I do, and I believe the President's in this category, really think manufacturing is essential. One, the wages are better, the benefits are better, people stay in the jobs better for that group of people that are not going to be brain surgeons and astronauts. Secondly, if you look at manufacturing, it employs about 80% of American engineers. It accounts for about 90% of private sector R and D. It disproportionately accounts for productivity gains. So if you go write down the kind of things you use to measure your economy, more and more, manufacturing throws off about eight or nine jobs for every job in manufacturing. And these are good jobs. So. And finally, you need manufacturing to have innovation. You need manufacturing to defend your country without manufacturing. And that doesn't just mean, on this national security issue, doesn't just mean being able to make bombs and submarines. It means being able to make steel and automobiles and batteries and solar panels. And you have to make all those things to have and semiconductor chips to, to wage war and, or to deter a war from happening, which is probably really our objective. So these people who think we're post industrial are just fundamentally wrong. And once again, they don't really, it doesn't bother them who owns America. It doesn't bother them the distributions in the country. And, and it doesn't bother them that we're following behind technologically. What they're thinking about is, yes, but we're optimizing consumption.
- [37:27]
Tucker Carlson
Like, if it doesn't bother you who owns the country, if it doesn't bother what's happening to the people who live in the country, then, you know, I think it's fair to assume you have no love for the country. How did people who have no love for the country end up running the country?
- [37:41]
Robert Lighthizer
Well, that's a, you know, that's a good question, one on which I think you and I have a lot of agreement, but on which I profess less expertise than I do on other things. It is, I, I think a lot of these people, well, some of them just don't like the country because of our history for various, they'll take up a data point in our history and say that means we're bad. A lot of them take it for granted, you know, but, but, but I'm, once again, I'm not an expert on that. I, I, I certainly, certainly agree with your conclusion. It's, it is, it is, it's troubling to me. People who are globalists, not only economic globalists, but sort of geopolitical globalists, they don't realize that there's a force that wants to take over the world. Indeed, there are lots of them. And those forces, if they succeeded, would be very bad for America. A lot of us who were sort of united in this Cold War, particularly in the early years, it kind of brought the country together. We Realized we were in a cold war. Indeed, I think we're in a cold war, a second cold war now. But I think there's just more fifth columnists than there used to be.
- [38:53]
Tucker Carlson
A lot more. A lot more what, how tiny a minority of economists believe what you believe. Like how out of step are you in, in Washington right now?
- [39:08]
Robert Lighthizer
Well, I mean, so I, I basically, you know, people say why do I think the way I think? And some people will say it's because you're from Ashtoville, Ohio, which was one of the, the places that was decimated. One of a million.
- [39:19]
Tucker Carlson
What did they build there in your hometown?
- [39:21]
Robert Lighthizer
So, so, so Ashtabilla was, it was a great town. It was a, it was a little town between Cleveland and Erie, Pennsylvania. It was a port town. They had steel, they didn't have steel mills, but they had steel fabrication. They made a lot of auto parts. Indeed, at one point the, the fiberglass body of the core of that was made in Ashtabula. One of the famous things about us, they brought in ore from the Great Lakes and trained it down to Pittsburgh where they made steel. Obviously there was agriculture, a lot of agriculture in the area, a lot of machine tools, those kinds of things. It was the sort of stuff that was really, really hit first with the Japanese wave that came on. And, and which wave was one of the other motivating things in, in President Trump's mind because he, that was the first thing that we all complained about was Japan and Japanese cars and the like and it was all Japanese manufacturing. And once again, I, I just want to say, because I, and I, and I love Japan, I'm not anti Japanese at all. But that had nothing to do with economics either. It was, it was, they kept their currency low. They had an industrial policy to subsidize all this. And then they, we sat here and they took our jobs and now we're seeing that on a, on a, on a far greater scale.
- [40:50]
Tucker Carlson
What's, what's your hometown like now?
- [40:53]
Robert Lighthizer
Oh, you know, I cover this in the, in the, in the book. It's, it is. Now, I have to be careful because I love my hometown. But you know, the poverty rates probably 35 or 40%. Gosh, yeah. The college graduation rate is probably 15 or 20%. And by the way, by the way, this is not like we're some, the bottom of the pit. This is across the country, the whole United States. It's everywhere you go you see these kind of communities. These were world wealthy people. I mean, they weren't wealthy people. They were people who were well off. A person could have a job, own a car, pay off their house and support their family. And now they can't do that anymore. And there's this kind of notion that, well, you know, other jobs have come back. And indeed in many cases there have. And there was just a study by Gordon Hansen out of Harvard and some other people. Other jobs did come back, but they were jobs at the lowest level of healthcare and the like. In other words, they were. Did employment come back? Yeah, but the people went from, from having the kind of job that I described, one that you could support your family and be proud of to one where you really couldn't.
- [42:11]
Tucker Carlson
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- [43:29]
Robert Lighthizer
Sorry, just look at the dignity of work is what is the key. But useful work, creative work, useful, productive work, useful. And what I always say, Tucker, is we need a country where parents are hopeful for their children but where children are proud of their parents. And we're losing that. We need that. We need families where people work and do productive, good work and they're proud of the work and they feel better about themselves and they project that to their children and to the community, to the Little League, to all these kinds of things. These people who worked in these factories and actually, Bill, when I was growing up, and some of them and some farmers, they were proud, hard working people who at the end of the day, you know, said, my dad, is this my. You know what I mean? It was a, it was a proud, healthy thing.
- [44:26]
Tucker Carlson
What did your dad do?
- [44:27]
Robert Lighthizer
Yeah, my father was a doctor.
- [44:29]
Tucker Carlson
Wow.
- [44:30]
Robert Lighthizer
Yeah, my father's an interesting story. His, the, the lighthizers. Of course, there's a lot of us that aren't lighthizers. Right. But the lighthizer strain came over to the United States in 1748. There was a guy named George Lighthizer who came up. He was an illiterate from what is now Germany. He, he fought in the revolution. He was two years older than George Washington. He was an old guy. He fought at Trenton. He was at Valley Force. This guy with, you know, at Princeton, he was on the line with two of his kids who were quite young, all three of them on the line together. He got out after three years. Of course, by this point, I don't know what. He would have been maybe 48, which was an old, old person. The kids stayed on and fought all the way through to Yorktown. So, so, so fast forward multiple generations and, and it's a whole interesting fewer generations than you think, but I'll tell you, I'll mention that because it's sort of a quirky thing, unrelated to what we're talking about, but sort of interesting. But you, you find my father and his Brother after that 100, 200 and some years up here were the first ones to go to college. And both of them went to college and ultimately to medical school. My father graduated from college at 29, having worked in the steel mills before he went to college, and then finally ended up graduating University of West Virginia and then NYU Medical School. So it was like the American dream.
- [46:01]
Tucker Carlson
How did he wind up in the town in Ashtabula?
- [46:05]
Robert Lighthizer
Yeah, you know, he was. They were from Ohio. They were from the other side of Ohio. I think he knew some people in Ashtabula. This would have been, you know, in the, in the mid-30s. Right. 1930s. But in terms of this, this is just quirky thing. So my grandfather's grandfather. All right. No, I never knew my grandfather. At my father's side, my grandfather's grandfather fought in the Battle of Baltimore.
- [46:37]
Tucker Carlson
That's incredible.
- [46:38]
Robert Lighthizer
In 1814. So my grandfather said, if you think of it, it's just like, you know what it is? A bunch of Older guys having kids, like one after the other. But it's like one of these kind of weird. I tell people, they'll think, what? That can't possibly be true. But it's in fact true. My grandfather's grandfather and that guy who had. Had half brothers who, who, who fought at, you know, in the American Revolution.
- [47:04]
Tucker Carlson
Amazing.
- [47:05]
Robert Lighthizer
It's just like a little, little way that it's. It's kind of a crazy thought.
- [47:09]
Tucker Carlson
Are there any lighthizers left? You know, there are in the town there.
- [47:12]
Robert Lighthizer
I know they're none. We're not in the town. No, no, there's none of the town.
- [47:16]
Tucker Carlson
Did you go to high school there?
- [47:17]
Robert Lighthizer
No, I didn't. I went. I went away to school in. Outside of Cleveland? Yeah, I went to a Catholic boys school outside of Cleveland called Gohorn Catholic School.
- [47:24]
Tucker Carlson
Grew up with. Are any of them still there in the town?
- [47:27]
Robert Lighthizer
Yeah, there are some. Not a lot, but there are some. It's a different world. And as I say, if it was just Ashdabullah, who would care? But it's not just Ashdabila.
- [47:39]
Tucker Carlson
We got to care about every American.
- [47:40]
Robert Lighthizer
It's across the country. It's like this. You go to Cleveland, you can't go to these major cities. It's Chicago, it's Omaha. You go to these cities and you say, it shouldn't. Shouldn't be like this. And the kind of notion, Tucker, was that we were sort of taught at a period. Well, it's, you know, the people were lazy or they were in unions and that was bad, or that the managers were bad, and none of those were true. It was the result of an economic policy largely in other countries and a defenseless, kind of foolish notion of benign neglect in America. And all of these bad outcomes are the result of this and other things. I don't want to simplify too much, but it's a sad thing and we now have a chance to turn it around. And is that going to create disruption? Of course it's going to create. There's never been great change that didn't create disruption. But the price which I don't think will be great will be dwarfed by the benefit if we have people, working class people in the middle class again and hopeful and, and dignified and staying married and, and innovating and doing the kinds of things that, that America needs.
- [49:03]
Tucker Carlson
There's nothing I want more than that for the country. And it. You can hear the bitterness of my voice just as someone who spent his life in D.C. but I just want to say, once again, that all of these changes were defended and explained by a whole, like, field of academic study and the propaganda that it supported coming from Washington, the free market think tanks, Cato, AEI especially, basically tried to tell you for 40 years as you watched your country die that this was all good.
- [49:32]
Robert Lighthizer
Yeah.
- [49:33]
Tucker Carlson
And I do think they should be publicly shamed for that if not held accountable.
- [49:37]
Robert Lighthizer
And so in some cases it was, it's, it's a combination. And then I want to get back to this question about economists. At some point, it's a combination of that and corporations funding it.
- [49:51]
Tucker Carlson
Well, of course, they were just the instruments, right.
- [49:53]
Robert Lighthizer
Who literally benefit from it. And you're like, holy cow, why won't. And then you have to try to chase that through the political system. And so you end up with the Chamber of Commerce of the United States in favor of these things that are quite harmful to the people that I care about and that the president cares about. And they're not against these things because they help those people. That's just not a function. They're against them because the elites, the powers that be that are benefiting from the system object to them. Now, on your question about economists, there are a growing number of economists who see this problem. They don't necessarily agree with me on the solution. Right. But if you see, you know, Angus Deaton is one who would say we have to reevaluate whether the costs of this thing called free trade were worth, were worth the benefits. And that's an important first step. There's a Paul Romer, another Nobel laureate, has the same thing. But so you can go through and you can find various ones. There's a guy named Michael Pettis who's a Carnegie guy who's, who's thought these things through and is, he wrote a book 10 years ago called Trade wars or Class wars with a guy named Matthew Klein. And it's a, it's sort of, you know, so there is some, some movement. But I don't want to suggest that it's a light at the end of the tunnel. It's maybe a prick, you know, a thousand miles away. But, but I'm, you know, I'm hopeful that economists, I've had several of them tell me, well, you're wrong, but you're, you at least realize that, you know, we at least agree with you that things aren't good. You know, there's, so there's, there's the beginning of people starting to see it.
- [51:44]
Tucker Carlson
Is they, I mean, the city had a collective heart attack when you became United States Trade Representative I think that's fair statement.
- [51:52]
Robert Lighthizer
The city and the business community.
- [51:55]
Tucker Carlson
Yeah, the, the business community. So you said there were. If you take a system that's been in place for generations, which the current one has been, even if it doesn't work well, even if it hurts your country, changing it is still, or changing anything that's been in place a long time is still a major lift and it has, you know, turmoil that accompanies it. So can you just be more specific about what sort of turmoil you anticipate as this administration puts into place this new system?
- [52:27]
Robert Lighthizer
First of all, I have complete confidence that the president will do what he said he's going to do, right? And unlike a lot of politicians, he ran on like real substance and big ideas. And this is probably the biggest of the ideas that he ran on. And I think he's going to follow through on his promises because that's the most important thing. The worst case would be that he doesn't. So what you have to do is put in place tariffs, as I say, to offset not just tariffs. That's a tiny thing. I just keep going back to this point because it's so fundamental. The problem is not just foreign tariffs, that's a tiny part of the problem, but to offset this unfairness. So he has to put those tariffs in place. When you do that, I do not believe you'll have inflation and we should talk about that in a systemic, fundamental way. But you will have people who have supply chains that are going to have to make adjustments. You've got some things that may go up in price for some period of time. And these, all these kinds of things will have an impact on people in daily life. But I think it'll be short termed, I call them disruptions. I think it'll be short termed. I don't think it'll lead to systemic inflation. And I think that people say, well, what should a businessman do? And I say, the smarter businessmen and business women are going to figure it out, right? And they get paid a lot of money to do that. And they're going to say, here are the rules. Just on that point, I've had business people, really smart business people, when I would explain this problem and they would say, and Bob, it's the government's responsibility to set up the rules. I'll figure out a way to make money in the rules. That's my responsibility. But I shouldn't be doing this social stuff. That's not my job. My job is to, is to, is to make whatever widgets and to make them profitably employ my people. And I think that's kind of an important point. It's President Trump's responsibility now, he's the president, to set in place a system where these good results for our people will come out. And I think he will. So if you, you're going to have, have tariffs to offset this basic unfairness, that'll lead to some disruption over a reasonably short period of time. I think you're going to see this manufacturing renaissance, these new jobs, wages go up. Right. This notion that we're not productive because our wages are going up. I'm like, I had this conversation with someone in the White House early on, and this is in the first term. And, and he was concerned about wage inflation. And I said to him, I said, this is.
- [55:20]
Tucker Carlson
By the way, we're paying Americans too much.
- [55:22]
Robert Lighthizer
Yeah, this, exactly. This is like a person that had his plane on plane. And now, and I'm sitting, I said.
- [55:27]
Tucker Carlson
You can guess who it was.
- [55:28]
Robert Lighthizer
Yeah. I said, we haven't had. We haven't had a raise in the middle class in 15 years. And you're worried about wage.
- [55:37]
Tucker Carlson
This is a man with a plane.
- [55:39]
Robert Lighthizer
I'm, I'm playing. I'm playing. I'm praying for wage inflation. This is what I want, you know, I want these people to make more money and do better and inspire their children and do all the things you do in a community to make the country great. So, anyway, there will be changes. The whole notion at a micro scale, in my opinion, it's to take more resources from the very wealthy and spread them out among the people. So a liberal will say, I diagnose the problem the way Lighthizer does. Let's tax the rich people and give it to the other people. To my idea. That's insanity. What you need to do is devise a structure where these people have good jobs and make lots of money, and that's the way you transfer resources and make the country good. You don't do it by tax policy or things like that.
- [56:33]
Tucker Carlson
So what's the President done so far? And what do you anticipate he will do going forward?
- [56:38]
Robert Lighthizer
So, so when you think about, about tariffs, you have to kind of think of in two categories. There are. There. There are, I think, like two buckets. There are national security issues which you have to deal with. And if the issue is a sufficient importance to really merit national attention, you should do everything you can to solve that problem. If we were in a war, people would say, of course, do whatever you have to. Right. Take over Whatever. So he has some things, and in this case primarily, there's some others, but primarily this fentanyl issue with Canada and Mexico, mostly a Mexican issue, and that's a national security issue, in my opinion. It's not an economic issue and it should be separated from it. Do you think fentanyl is a sufficiently important crisis to merit doing everything you can to solve it? I believe it is. So for me, doing something in that space makes sense. And the President threatened that and I think we got good results. That's national security. The bigger question is what. And you can use that tool in other times. But, and the debate is not whether the tool's appropriate. The debate is whether the national security issue is of sufficient importance to pay that price. So then the other issue is tariffs generally to get us to, I would say balance. Some people would say fairness, some people would say reciprocity, but basically to get us to balance, to offset all this unfair, not just terrorists, but unfair practices. And I think what you're going to see on April 2nd is an attempt, you're seeing the USTR and, and Secretary of Treasury, US here doing the kind of day to day work on Secretary of Treasury and Secretary of Commerce recommending to the President a series of tariff increases. And now how the form that takes, I don't think it's really been determined yet. I think the direction is, the need is. But I think you're going to have to have a system that says here are the issues that are part of this industrial policy that are creating this unfairness. And one of them is, as I say, taxes and value added taxes. And if people are. So we could talk about that in a second. And then the notion that the President has is, well, we'll tariff people in order to get them back to whatever we think of as enough to offset their unfairness at some point. And, and he's right, of course, but at some point you're going to simplify that because you can't have 4,000 tariff codes and 180 countries. And you know, I mean you could, you, you would need a supercomputer to decide what you know. So at some point there's going to be some, some, some synthesizing of it to sort of say, okay, if you're in these categories, if you have these things, you get this rate and that and, and, and, and, and the, the important thing for people to understand, I tried to explain to people, it isn't like he's going to say, okay, here it's April 2nd. Now going forward, everything is perfect. You're going to have to have adjustments. We're always going to still be here. There'll be mistakes in the way it's made and you're going to have to take care of exclusions in individual people and work it out. We did that. And one of the reasons that when the president imposed tariffs in such a grand way the last time, it never happened before, the reason that it didn't blow up really was that we let the steam out of the balloon when we had to. We did enough so that we took care of urgent problems that might have collateral effects which were not good. And so you're going to see modification, you're going to see change.
- [60:27]
Tucker Carlson
So there are a lot of fine motor skills involved. It's not just.
- [60:30]
Robert Lighthizer
And you have to recognize that. You have to recognize. And it's going to be mistakes are going to be made and. But the problem is here we have to do this remedy and we've got to get there as quickly as we can. And another thing to remember is in the first administration, there weren't that many people who agreed with us. Right. As you say, there was the president, who people everybody thought was crazy in this area and me who they thought was maybe crazier, but the Overton window of acceptability has moved.
- [61:01]
Tucker Carlson
Yes.
- [61:02]
Robert Lighthizer
And so a lot more people understand the crisis a lot. And, and in fairness, the data has helped us make our case that, that you have to do so. I, I think people are going to be more accepting of it, but you're going to have disruption, you're going to have the people who are benefiting now benefiting less and they're not going to like it. I think that's the best part, you know. Yeah, it is. You know, there was this thing called concentrated benefits and diffuse payments. This guy Buchanan, who was the economist, and he basically talked about the political system and he said that sort of things happen when the person who gets the concentrated benefit, he is more motivated to get his way and to push his way through than all the people with diffused payments. And we've kind of had that system. My hope is that we can kind of reverse that and push back on those people who have had the concentrated benefits and give more of the benefits to the people who until now at least have been relatively quiet and just accepting of a pretty bad hand dealt to them.
- [62:10]
Tucker Carlson
So of all the. I just want to go back to the downside for a second short term downside of all the potential effects of changing our system to the one that you describe it Seems to me that inflation is certainly, as a political matter and an immediate matter, the scariest. First of all, it's really easy to measure. Second, it. Or it's obvious, I don't know, it's easy to measure. It's very obvious to people when the things they buy regularly become more expensive. So, I mean, I just want to linger on this for a second. To what extent are we going to see increased inflation because of this?
- [62:47]
Robert Lighthizer
So, Tucker, I think there's going to be disruption, and disruption is going to have some prices go up and some won't. So let's think about inflation just the way we should think about it. One, inflation is a systemic thing. It's not like your shirt costs more, if your pants cost less. That's not inflation. That's just a more expensive shirt. So the question is whether it's going to systemically raise prices. A lot of people would say, including Milton Friedman, that's really a monetary phenomenon. It's basically monetary policy that's going to dictate whether everything goes up, how much money is print. And this is not going to change monetary policy necessarily. Now someone might say, oh, it's going to slow down the economy, thus we should lower interest rates. Someone else will say, it's going to have inflation, thus we should raise interest rates. So it's kind of a conundrum for the Fed. But, but set that aside. The notion is that you will increase production in the United States, you will maintain consumption at about the same, and that will not be inflationary. If anything, it'll be deflationary. So that's our idea. There's a model that some economists use called the GTAT model, which, by the way, generally assumes you cannot get economic growth, that you're a full capacity, industrial capacity, and full employment. So if you have a model like that, then that's going to show inflation. But I would suggest that the model is not predictive. And indeed, the St. Louis Fed made the statement a few years ago that the predictive quality of this model is 0.0%. So a lot of the economists are using a model that's. That's unhelpful. But so the notion is you're going to increase production and that will happen, and that that is not going to be inflationary. The idea is that inflation is systemic, not individual prices. So you can't just stack stuff up. The other thing is in the argument against inflation is that we did it last time in a big way. All the same people said it would be inflationary and we had no inflation. Right. We had 1.3%, so we had no inflation. So they were proven wrong. And then the final thing I would say, if the notion that economists use, which is that trade barriers create inflation and that's the basic notion that you're talking about on their side, why is it that China has deflation and not inflation? Why is it that the country with the most trade barriers actually has no inflation at all? And if you look like at Germany, they have some inflation, but it's less than a lot of the rest of Europe. So it would suggest that there is not necessary relationship between tariffs and inflation.
- [65:38]
Tucker Carlson
Would suggest it.
- [65:39]
Robert Lighthizer
I mean, and I, and I would add one other thing. If you look at the president's program generally, all right, the program is going to be tax cuts, spending cuts, deregulation, more energy and tariffs. Now even all but a hardcore partisan would say the combination of that can't be inflationary. Right. The combination of cutting spending, getting rid of regulation, increasing energy, those things can't be inflationary now.
- [66:13]
Tucker Carlson
So they're anti inflationary. They're all we have inflation because we've done the opposite. We made energy more expensive. That's precisely spent too much.
- [66:19]
Robert Lighthizer
That's precisely right.
- [66:21]
Tucker Carlson
Okay, China. So you mentioned Germany, obviously the beating heart of Europe. It's decided to commit suicide. So who knows where Germany will be. It's hard to see Germany as like a real threat to our economy. I mean, I can't predict it, but it seems, it seems like it's really a conversation about China.
- [66:41]
Robert Lighthizer
So, so there are kind of two things. One, we have a trade problem and that problem is trade deficits. And it's having all the bad effects that I said on our people and on the wealth of our country generally. That is a problem that has to be resolved. Connected, but independent of that is the question of the geopolitical competition.
- [67:04]
Tucker Carlson
Exactly.
- [67:05]
Robert Lighthizer
With China. So I always start with, you're either on one side or the other. And I put people in like three categories. Tucker, there are people that study the issue and I'm going to go through the kind litany in a minute. But to set it up, there are people that study this issue and say China is an existential threat to America, they are an adversary and we have to make change. And I'm in that group. There's another group that studies it and says China is an existential threat, they're an adversary, but we don't need to do anything because it'll all kind of be resolved through this or that. That's a group that Was very popular in the 90s. It doesn't really exist anymore. I call it the unicorn group. Right. They people who have kind of been proven wrong that it's just, you have to do something. The third group are people that study it and conclude that there isn't a problem, China's not an adversary, and there's no et cetera. That group is all invested in China. Right. So you can kind of divide the world. When you think, when you're talking to someone, which of these three groups are you in? If you're in the last group, then you are basically compromised person because no rational person can look at the data, look at the facts and conclude that China is not a threat and an adversary. So, so let's look at.
- [68:24]
Tucker Carlson
Can I suggest a fourth group?
- [68:26]
Robert Lighthizer
What's that?
- [68:27]
Tucker Carlson
Might be people who look at the current situation and say, yes, China's an adversary. Yes, China's economy is larger than ours. Yes, the future belongs to China. We are not equipped for a confrontation with China either economically or militarily. And so we have to kind of figure out how to deal with the inevitable.
- [68:45]
Robert Lighthizer
So, so yeah, this is kind of the, the defeatist caucus, right. The one that is all over for the world. I generally find that group has a very large overlap with group three that I articulate the people invested, the people invested in China that are already going to make money. But for sure there are people. But I always say to them, you know, you can't say do nothing in the face of a crisis. If you say do nothing in the face of a crisis, then I have not convinced you that we have a crisis because it's irrational. If you accept the fact that it's a crisis to say do nothing. That's not a rational.
- [69:25]
Tucker Carlson
Well, it's kind of lie back and think of England kind of thing like it's going to happen.
- [69:30]
Robert Lighthizer
So while England slept. Yeah, yeah. Although there was a lot. There were a lot of, a lot of differences and a lot of other things going on there. And when you, when you mention that, I always think of Neville Chamberlain who before he was prime minister was Chancellor of the Exchequer and he, he approved the sale in the 30s, 180 or whatever it was. Rolls Royce airplane engines to rearming Nazi Germany, which just on his face, ludicrous. And his explanation was that trade, like religion, should know no boundaries. So while rearming Nazi Germany was a threat, it was more important that we sell them things even if they're going to use them to bomb us. I always said, I don't know why but when you mentioned England during that.
- [70:19]
Tucker Carlson
Period, that's the first capitals to sell you the rope.
- [70:23]
Robert Lighthizer
Exactly, exactly. So let's think of why I have this conclusion. And a lot of. None of this is going to be news, I don't think, to anyone who's listening, but one China has the biggest army in the world and they're growing it. They have the biggest navy in the world. They are militarizing the South China Sea in a way we haven't seen since the Second World War. They're claiming shoals, building 18 inches of cement and having places that you can militarize and land boats on. They are asserting territorial claims all around them. I mean, it's not just Vietnam and Philippines, but it's also Japan. And you could just go all around them. They are engaging in espionage on a scale we haven't seen. The FBI says they start a new Chinese espionage case every few hours and they have thousands of them. They have suborned perjury from two sailors about last year and, and a month ago two army officers to, to. I'm not perjury, but espionage, you know, to, to sell secrets to them. They are building nuclear silos all over the place. They have their diplomatic wolf warriors go around and do whatever they think is going to be disruptive of the United States. They're building military bases around the world. They have things like this thing that's on the news now and this shipping company at either end of the shipping facility at the other end of the Panama Canal. So I mean, they're gathering data. They're engaging in economic warfare with the United States in terms of stealing technology and technology transfer and all the kinds of other things of which we are aware. They are funding the war in the Middle East. They're funding the war in Europe. Europe, just without question. It's their money. And they're selling all the fentanyl that the pre courses of all the fentanyl that comes into the United States. And it's not like the people that are selling the precursor for the fentanyl are an odd group. They're big companies in China that are doing it, I would suggest with the approval of the Communist Party, because they don't have the problem at home. So if you sort of set aside the diplomatic, the military, the economic, you put all these things back to back and then you look at their own words where they talk about change not seen in a hundred years and prepare for war and all these kinds of things, it's pretty clear that their view is they should be number one in the world. Their view is the world is better off with totalitarianism, politically Marxism and economically communism. Right. This is their, their, their scheme and, and that we're in their way. This is their objective. They've, there's this centrality of China runs through their history for, for, for, for 2000 years. That and, and, and we are a problem. So, so for all of those reasons you have to realize we have a real existential threat and we have to do something about it. And the first thing you do is you stop transferring hundreds of billions of dollars of wealth to people that they're using to build technology and military systems to defeat you. Right? That's the first thing you do. And we are doing that. We are transferring, we're transferring hundreds of billions of dollars in trade deficit. We are transferring hundreds of billions of dollars in stolen technology. We are transferring money through this fence all crisis that we have. If you look at all of these things you have to stop that. It is like the first thing you do is you stop digging when you're in a hole. So what we need I would propose is not no economic relationship. I'm not for decoupling but I think we need strategic decoupling. I think we need balanced trade in areas that benefit Americans. I think we need independent technology going forward made with America and with Americans allies. And then I think we have to regulate ingoing and outgoing investment so that it's in the interest of the country. So I think we need a heads up kind of a policy. We can't keep going on the direction.
- [74:53]
Tucker Carlson
I agree. They also bribed the last president. If I could just say very obviously which is kind of a big deal, it's been ignored. How do we regulate investment in China?
- [75:06]
Robert Lighthizer
Well so the first question I would say how does China regulate investment in the United States? Right. They have a state body that says this is in the interest of China. Therefore you can invest in the United States because you're going to get data or technology and inbound investment. If you try to invest over there they got people who sit there and say interesting interest of China or them and they just do it this in China. So we, we really need, in terms of inbound investment we need to take cfius, this group, this, this, this, this group at the Treasury Department and expand their mandate and fill it through a. Right.
- [75:39]
Tucker Carlson
So you can't invest in Iran, you can't invest in Russia, you can't invest in Venezuela right now.
- [75:44]
Robert Lighthizer
Well you can only invest in China if they determine it's In China's interest?
- [75:47]
Tucker Carlson
No, but I'm just saying like, no, you do have all kinds of about where Americans can invest their money, but they don't apply to China.
- [75:54]
Robert Lighthizer
No.
- [75:55]
Tucker Carlson
And you're saying they should.
- [75:56]
Robert Lighthizer
Well, I, for, for sure there's two sides to it. Right. The inbound has to be strengthened so that they're not buying, buying into things where they can get data which they can use to, to, to, to feed their AI or, or, or technology. Not just military technology. I would say any high technology and then out outgoing. It should only be investments that are in the interest of the United States. Yeah, for sure. We ought to, we have to do that. What's going on now is you have a group of people on Wall street who make money by funneling money to China and that's. Those people don't, I don't know which of the three groups they're in, but you can guess. But for sure those people have to be stopped. Right? We have to stop that. And I'm not saying no investment in China, but it has to be something that's in our interest, not in, in, in China's interest.
- [76:51]
Tucker Carlson
The howling that will occur if you try to restrict the ability of American citizens to get rich in China will be really loud.
- [77:00]
Robert Lighthizer
So, so I don't really think the people who get rich in China are, are people who, who take your money and, and, and bring it to China. Right. In other words the bankers and the like. Then there are people who manufacture to sell in the United States or in other places in China. That group, that group interesting all has a, a half life because as soon as China gets their technology they don't need them anymore and then they squeeze them out of the business. I, I could give you any number of, of cases in nuclear and there's a company called Ball Corporation which makes you know, containers and you know, you know, they were the biggest in the U.S. then the biggest in the U.S. and the biggest in China. Now they're the biggest in, in the US they're not in China at all. And the Chinese have competitors and I could give a hundred examples of that so people can temporarily make money there while it's in their interest for, for, for you to do it. But once you get to the point that the, the Chinese say now why exactly am I giving you a piece of this action? When you get to that point you're on the way out. So I, the, the, the, because I have two things. One, the, the people who actually are making money are sort of financializers. If you will, manufacturers will do it for a brief period of time until it falls off. And then the other thing I would say for sure there's going to howl. But I always say it's a little bit like undertakers being against cancer research. Right. My view is. So you're against cancer research. Right. He's bad for business.
- [78:34]
Tucker Carlson
You're absolutely right. How do the financializers get rich in China?
- [78:38]
Robert Lighthizer
Well, I mean, they get a fee for, for bringing money to China. Right. So, so it's like they do anywhere else. Right. They, they, they sell bonds.
- [78:48]
Tucker Carlson
Yeah.
- [78:48]
Robert Lighthizer
They, they facilitate investment and they get a piece of the action.
- [78:53]
Tucker Carlson
They're politically powerful.
- [78:54]
Robert Lighthizer
Yeah. There's no question about it. There's no question about it.
- [79:00]
Tucker Carlson
If you were to, this obviously just broad strokes here, but if you were to radically reduce the amount of manufacturing that American companies outsource to China, could you take up that slot? How long would it take to, to replace that manufacturing with manufacturing that is.
- [79:17]
Robert Lighthizer
Going to happen with, with, with tariffs. They are in fact coming back. That manufacturing is going to come back. So it's going to have that effect. And I think it'll take relatively less. Now it's all not coming back. Right. Some will go to other places. And my own own view is that it going, for example, from China to Mexico could very well be in the interest of the United States. Not if it's a Chinese company doing it, but I mean, when it, when a US Company brings a facility from China and puts it in Mexico and employs Mexicans, that's more in my economic interest as an American.
- [79:50]
Tucker Carlson
I think that's right. You know, a stable Mexico is in our. Yeah, exactly.
- [79:53]
Robert Lighthizer
And I think that sort of thing will happen and is happening.
- [79:56]
Tucker Carlson
Yes.
- [79:57]
Robert Lighthizer
That's not to say that we don't have a crisis down there of Chinese investment. And we can talk about that several times in Mexico. Yeah, it's a huge, huge problem.
- [80:04]
Tucker Carlson
And will you explain that?
- [80:07]
Robert Lighthizer
So, so, so, so what has happened is we, we renegotiated USMCA and tightened it in a bunch of ways and really created the most pro manufacturing, pro America trade deal in history. Right. We, for the first time, the President was one of President Trump's great accomplishments. At first anybody had ever renegotiated a big agreement they ever sort of thought of as eternal, like, like marriage or, or religion or constitution or something. We, we renegotiated it. At the same time we put tariffs on China. Right. Unrelated, but we put tariffs on China. So what China was trying to do is figure out a way to get into the US Market without paying the tariffs. Now, a logical way to do that, it would be to move stuff to, to, to Mexico. And, and as part of that process, they are infiltrating the Mexican infrastructure. They're, they're in. The numbers are quite large. It's, you know, billions and billions of dollars of investment by China and, and, and this Rhodium Group and others who have studied to say the numbers probably six or seven times what the public numbers are. So it's, it's hundreds of billions of dollars of investment. The purpose of this really is to ultimately get to the US Market, but also to sort of infiltrate the system in Mexico. And I would suggest it's very bad for the United States and it's very bad for Mexico and ultimately the President is going to have to deal with it. And I think he's aware of that. This is a, this is a freight train coming down the road. So if you take Chinese content and just, you know, substantially transform it, just, you know, paint it or something and then bring it to the United States, that's very bad. So you've seen increases in Chinese exports to Mexico of 50% a year for a number of years. And, and a lot of that I think is fine. It's going to United States and is dislodging other. A sensible investment.
- [82:13]
Tucker Carlson
So giving China some control over Mexico.
- [82:16]
Robert Lighthizer
Oh, that's no question. And, and the President of Mexico seems to understand that, at least to the extent you can in their system. So we, it's a big problem. I mean, and a lot of it has not come on stream yet. So it's huge auto investments. It's a lot of things that they're doing that haven't even come on stream yet that are going to come down like a, like a locomotive down the highway. And, and, and it's all bad and we have to do something about it. And, and, and the reality is probably that's going to be tariffs and it's going to have to be, it's going to be some way that you, that you separate like U.S. companies and, and neutral countries like companies like the Japanese who are operating down there and abiding by the USMCA and this whole Chinese infiltration, this whole coming in.
- [83:05]
Tucker Carlson
One of the things I've learned from traveling is that a lot of other countries, like dealing with China because they're easier to deal with. There's no lecturing about democracy or transgenderism rights for various groups, whatever. They don't, they don't feel as manhandled as they do by, you know, their experience with American government officials. Would it be helpful for the US Government to take a less hectoring tone around the world?
- [83:35]
Robert Lighthizer
Well, obviously first of all, they also like China doomism China in many cases because they don't have a foreign corrupt practices act. Well, exactly, yeah. And, and, but, but I mean to some extent it's because they, they can influence you in ways personally. So there's, there's a lot of what's going on in this belt and road is going in there influencing local officials who then take on great amounts of debt, put in a Chinese infrastructure goes to hell. So, so, so some of the advantage that China has is just pure old corruption. Right. That we wouldn't want to be a part of it is.
- [84:06]
Tucker Carlson
But we also, it seems to me hamstring ourselves by our posture toward other countries. Like it is very off putting to have American officials come into your country and start telling you that your like ancient way of life is immoral.
- [84:20]
Robert Lighthizer
No, no, no, for sure. People don't like that. And that's, that's, it's, I mean it's counterproductive and wrong. So I. Boorish.
- [84:28]
Tucker Carlson
Right? I wouldn't invite someone like that to dinner at my house.
- [84:30]
Robert Lighthizer
No.
- [84:34]
Tucker Carlson
So one of President Trump's ideas, I don't know if it's been fully articulated, but it's very obvious from watching, is that we can re establish some sort of economic relationship with Russia once this war is resolved, God willing. Could that happen? To what extent could that benefit the United States if it did?
- [84:55]
Robert Lighthizer
So, so, so first of all, you know, the, the amount of time that I spent worrying about Russia in the trade and economic sphere was minimum.
- [85:03]
Tucker Carlson
Right, I'm sure.
- [85:04]
Robert Lighthizer
Yeah, of course they're small. They're, you know, they're a small, you know, they have GDP smaller than Canada and they're basically, you know, people would, you know, get into basically a gas station right there if they're an energy producer. And not much. There was a time when they were also very much at the cutting edge of technology. But that I think that's kind of waned and you know, depending on. Once again, this is sort of a little feared from where I'm an actual expert, unlike everybody else, I actually identify when I am and when I'm not. I find it's God bless you, it's helpful to me, but not other people. But I do believe that depending on how the war is resolved and it will be resolved, it's just, there's no question the wars are not eternal any more. Than trade agreements should be. But when that happens, I think you will see economic relations re established. I'd be flabbergasted if you didn't. The reality is that there will be demand, there will people that can sell. There are things you can do. But a lot of it is how it is resolved. If it's resolved in a way that Europe and others view themselves as still more or less being at war, then you're going to have a very slow recovery economically. If you view themselves is like we've turned a page and we're in a new decade, then my guess is you'll see people move more quickly.
- [86:23]
Tucker Carlson
The Europeans are grudge holders. I've noticed. Okay, you said you've, you're trying not to be partisan. I think you've done a great job because not all these are partisan questions. But in practical terms, what do you assess the chances of the Democrats, any Democrats supporting Trump on this program?
- [86:43]
Robert Lighthizer
So it should be really good. Let me, let me just say it should be.
- [86:47]
Tucker Carlson
I mean traditional Democrats will be supported.
- [86:49]
Robert Lighthizer
Labor, remember there's Democratic Party is a bunch of different things. Like we are, I guess. And labor Democrats should do that. Remember when, when I was, when I renegotiated the usmca, the president and I did, and then I worked its way through Congress and during this toxic time of impeachment and all of this, we worked it through for months and months and months in Congress and in the final analysis got 90% of the Democrats and 90% of Republicans to vote for it in the House and in the Senate. It's one of these things that people don't remember. But it was, it was, you know, whatever the hell. We had 385 votes in the House for it.
- [87:27]
Tucker Carlson
I mean, it was incredible.
- [87:29]
Robert Lighthizer
Yeah, people don't give us credit for that, but it was like historic. And then so they're impeaching the president and voting for maybe one of the biggest parts of his legacy. And, and there were a lot of Democrats, particularly in the House, who were key to that happening.
- [87:48]
Tucker Carlson
I didn't, I don't know how I.
- [87:49]
Robert Lighthizer
Missed, I'll tell you, I'll tell you a story. We have John Lewis, who was obviously like president at all, but who I admire as a, as like the lad he was then the last living civil rights person, someone who I greatly admire. And actually, I actually brought my, my senior political staff to meet him just, and they were just, you know, awed by him. Just. And he talked for 45 minutes about the civil rights movement. And we just sort of say this, you are the last person that's going to be able to talk to the last person who did this. But he made the statement, for example, he said, you know, I fought NAFTA with every bone of my body. I fought it as hard as I could possibly fought. And I never thought we'd have an opportunity to correct it, but now we are and I'm supporting this. So there were he was there, you know, Rich Neal, who's the that was then the chairman of the Ways and Means Committee, Nancy Pelosi was a supporter. But there were a lot of rows of the law, I mean, very hard left people who realized what we were doing was for working people and that was our constituency. So I think there is hope. Debbie Dingell has spoken about this recently. I think there is hope. But Tucker, it requires sales. It's not like you have to go up and actually do the retail work. I spent but I spent a huge amount of time on the Hill when we were doing this, a huge amount of time. I addressed twice I addressed the caucus of Democrats in the House, the actual the caucus, you know, once with Rich Trumka, the head of the FL cio, just he and I and took questions from the, from the Democrat. I'm sure that no one else in the probably any very many administrations from a different party has ever done that. So it requires sort of doing the spade work. But I really think it's worth it because this change economically is so important. It has to be bipartisan. It has to be acceptable. I'm not saying don't do it unilaterally, Mr. President, using existing law. I'm not saying that because I'm not Pollyanna. I think it would be very hard to pass something. But you do want labor, Democratic buy in because that's how you make something permanent is you have the smart people, the caring people, the ones who care about working people, and there's lots of Democrats who do lots of them. Getting those people to buy in I think is really, really important and sounds achievable.
- [90:17]
Tucker Carlson
So last question is about markets, equity markets, the S and P, the nasdaq that seems, I mean, that's the main measure that the media used to gauge the health and trajectory of the economy, as you know. So I mean, there are shows on TV just about markets. Do you think that's an accurate measure?
- [90:42]
Robert Lighthizer
So the answer is no. And it's particularly true in the short term. Right. Because the markets are affected more by the Fed than they are other things. I mean, the market's Basically affected as much by, you know, they're going to have interest rates go down as it is. Anything else? I think in a general way that's.
- [91:06]
Tucker Carlson
Kind of can, I suppose that's, that's a little weird actually. Markets are supposed to, equity markets are supposed to reflect the value of the companies in which you buy equity. Right. So it should be like, the measure should be like, how's the company doing? Right.
- [91:21]
Robert Lighthizer
And it's very often it's.
- [91:23]
Tucker Carlson
But it's kind of weird for the Fed.
- [91:24]
Robert Lighthizer
It's macroeconomics. Yeah. But the notion sort of is that, well, if the interest rates go down, you're going to have economic activity increase. So it's not crazy, but it's sort of off centered. I mean, to me, long term, it's fair to say what will the markets do? Right. Will these companies become richer under this system? American companies become richer under the system. The measure, the metric for me is did workers get richer? That's the metric for me. But if that happens, it should be reflected in the market. And so I think looking at a short term is very disruptive, very destructive, not right. Looking at a long term makes some sense, but it's not my metric. My metric after national defense, my metric is do most Americans do relatively better? And if they. In real terms and if they did, the country is better off and the economy has done what it is supposed to do. I actually, this is sort of in 1996 when Bob Dole, who I worked for, you'll remember as chief of staff and he was chairman of the Finance Committee, I wrote a speech that sort of made this point that look at the purpose of an economic policy is to generate wealth for the midsection. The rich, they'll take care of themselves. The poor you have programs for, but you want to take this is the purpose of it. And it was funny. I got all the smart people with all this resentment in me wanting to have him make this speech, which he agreed was right. He was a populous midwestern guy. And finally, I think when it was all over, we didn't really have a shot at the end. He just said, I just got to keep Lighthizer from grunting, so I'll give the speech. And he ended up giving it. So was he a good guy? He was a good guy. Bob Dole was a good guy. He was. You know, it's funny, there's like, there's kind of like different Bob Doles. When you live to be 97 or something. You have different, you know, you have the young Bob Dole I didn't know. And he went to war and got blown up and then kind of gritted his teeth and fought back. And who lived in the basement of his house so they could rent the upstairs, you know, so they could live. And then you have this guy in the middle who was the guy I knew was maybe the legislator of that time, the number one. You could make the case for a few other people, but I could. You could make the case for him being the number one legislator in that midpoint in American history. And then you have this older guy who, you know, who got the Eisenhower Memorial done and got the World War II memorand, did all these wonderful things in this different way. So I had this middle, this guy in the middle and he was a tough, hard, good, conservative guy. And I obviously was an enormous amount of affection. Stayed close to him his whole life.
- [94:10]
Tucker Carlson
Wow, Bob Lighthezer. That was an amazing tour through the past and I hope the future. And thank you for doing that.
- [94:18]
Robert Lighthizer
Well, thank you very much for having me, Tucker. I'll put this in my, in my obed. I was on Tucker's podcast, that'll be in the obedience.
- [94:26]
Tucker Carlson
And it was just one suck up question after. Mr. Lighthizer, you're a very handsome man. What's the secret? No, I just agree with you and I'm just so grateful to hear someone explain it clearly. For non economists, I think it's very important. I think it's been neglected and I hope this helps.
- [94:43]
Robert Lighthizer
Thank you.
- [94:44]
Tucker Carlson
Thank you. We want to thank you for watching us on Spotify, a company that we use every day. We know the people who run it. Good people. While you're here, do us a favor. Hit, follow and tap the bell so you never miss an episode. We have real conversations, news things that actually matter. Telling the truth, always. You will not miss it if you follow us on Spotify and hit the bell. We appreciate it. Thanks for watching.