intellectual property theft we're talking to the tune of six hundred
billion dollars a year potentially and you know American companies CEOs they're
not incentivized necessarily you know this Larry they're so worried about
their bottom line for the quarter and they want to look like they're active
over there in the Chinese market they're not thinking about what its gonna mean
ten years out 20 years out how it might affect their company but if US companies
remain vulnerable to this intellectual property theft you know I've said it
before China becomes us we're on our way to becoming France and we don't have the
advantages that we previously historically have if they've stolen all
our goods I think fair enough we have to protect
the crown jewels here I mean this is a key point this is one of the reasons why
I so strongly support the president's initiatives here to get China to make
trade reforms and get to a level playing field
look technology is the center of the American economy more so than any other
country and especially more so than China our innovations our new products
are based on you know inventing and applying technology so we cannot let
foreign powers be in a position to essentially steal the strongest and most
important part of our economy okay that's why we have to do this that's why
the president is not just raising the issue as prior presidents have but he's
the first guy to just take it to them and say look either you play ball with
us or we're gonna have to make our own remedies which mean I might not want to
make but the president will make it I'm not leaving here though I'm not
personally for tariffs but if it needs be the president has said many times he
will go to tariffs if need be and I will support that I'd rather see better
negotiations but as you put it we have to protect our own technological
advances we must and China has a very shoddy record here by the way the
telephone company equipment business is part of that trying to steal our
technology trying to hack into our system so let's hope that
talks move forward and therefore we can avoid some of these potential threats
but we have to stand up for the United States we really must Larry it's not
just the intellectual property theft it's also you know when we when we say
they're gonna be sanctions and China says yeah
what we're gonna go along with the sanctions we need to know that they are
actually doing what they say they're gonna do and you think about DTE and
they were selling to the likes of Iran they were selling to North Korea we hit
them with a big giant fine and the president actually I give him credit for
this because no other president actually was willing to say hey you guys are on
suspension they're not going to do business here in the US this president
did so if he eases that at all Larry what will we get in return I'm sorry I
couldn't hear the end of that if we want to ease is that you know that if he
eases his position on ZTE what do we get from the Chinese in return by the way I
Trish I wouldn't conflate the two they're separate tracks they're
absolutely separate tracks so let's not go there but they're not entirely
separate right because why do you give it pass to one company one Chinese
company well why don't you say hey this is what we want from you China period
and no company's going to get a special exception they're not getting a special
exemption they're not getting special anything if there are any changes in the
remedies they are going to be very very harsh and trust me on this amount to a
takeover if you will it's just completely different the trade talks
themselves however are opening up quite the reverse and that's a good thing and
that's why I've got some optimism bad and I think that's why POTUS has some
optimism about it we need a more balanced trading system with China
China's got to live up to its global expectations you know the World Trade
Organization China is undertaking illegal trading practices according to
the WTO even though the WTO never seen anything you know POTUS look Democrat
and Republican presidents before him have raised some of these unfair trading
practices shoes and then put them away you know you never heard from it again
the president is not going to do that and that's why these talks are important
and look if the talks don't work you can expect him to
some very tough measures on his own that's out there that's part of his
quiver but hopefully we can have a better mix and make the adjustments I
think the Chinese want a deal I'm not sure we're rather than the alternative
the alternative is some kind of trade war and you know look I would just point
out and I know you would say no one wins these things and I agree but we'd be
better off than them I mean they need us well they need us but we need them too
I don't want to take that kind of position look we live in a it's a one
world economy it's an integrated economy what we're asking for is not who's gonna
be better and who's going to be this we're just asking for somebody like
China to play by the rules we have international law which has been
essentially revoked by many of their trading practices and by the way the
whole world agrees with us forever nice to have that wind at our back right hey
Larry it is so good to see you wonderfully see
you sir a Coalition of the Willing I put very strong clamps on ziti they did very
bad things to our country they did very bad things to our economy but the
president of China President Xi asked me to look at it I said I would look at it
but anything we do with ZTE is always it's just a small component of the
overall deal so joining me right now National Economic Council director mr.
Larry Kudlow and liberty it's good to see you hello Trish thanks for having me
appreciate it very much don't weigh back the viewer may not know this but uh
Larry and I used to do a show together at one point in time it is good to see
you sir and I know you'll get a lot going on well your start Trish and I'm
Friday I just before we engage on this I just want to send my own personal heart
and condolence to the victims of this terrible Texas shooting I just want to
put that out there I know we're here to talk business but you know god help them
ya know I'm glad you did I mean days are tough tough days and
unfortunately we've just had far too many of them you know our kids should
feel safe when they go to school that should be one of the things that's just
sort of a given but Larry thank you for addressing that so back to China I know
you've been involved in some of these meetings in and out there today let me
ask you is the president really gonna do a deal here with a Chinese telecom
company well it's not the telecom company that's the center that the
telecom company it was really an enforcement measure which I guess has
been connected to the trade meeting may have more to do with the Korean
Peninsula to tell you the truth I mean President Trump and President Xi are you
know working together on a lot of things let me be very clear though we're
talking about remedies here we're not talking about let them off scot-free by
any stretch this came up in our discussions yesterday Commerce Secretary
Wilbur Ross is having a second look at remedies and if there is if there are
any structural changes in their case they will be very harsh trust me on this
huge change of Matt yes need to change the management change the board change
of everything so I want to just it's there I don't know it's up to mr. Ross
who will make a recommendation to the president it's not by any stretch you're
even remotely central to the trade deal well I guess it's just it's left some
people a little bit confused right because on the one hand you have the
president saying look we we need to fix this situation this very poor trade
situation we have with China but then on the other hand you know President Xi
says hey will you take a look at this and he said sure okay I'll take a look
at this while you have the likes of Christopher ray from the FBI saying you
know this is kind of dangerous if ZTE is able to you know function here as normal
then our security potentially could be at risk well I think the key point in
all this is that the trade talks are going very well I mean actually
President himself has shown more enthusiasm and optimism about this trade
deal than I've ever seen it in the whole discussions going back many many weeks
you know vice-premier Leo Hey you gave an excellent presentation to a small
group of us in the Oval he outlined a whole bunch of remedies for the trade
deficit issue and the barriers the tariffs and non-tariff barriers and also
of course the technology theft problems and president drop was very engaged I
mean I would just say this I'm only down here a couple of months now but I've
worked for them down through the years he's really much more optimistic than
I've ever seen and I think this is a good thing because it'll open the door
for flooding American exports it should be great for our companies and our
workforce and our productivity and we'll try to move China into the 21st century
okay I mean there so does that mean you're unfair trading practices but
stuff that nobody uses anymore they're still using Larry so you know and the
president articulated this well he's an example that I've actually used on this
show which isn't you know if you send a car to China you're gonna get slapped at
the 25% tariff and we just do a minor fraction of that if the Chinese send a
car here why don't we have a system where we can send as many cars back and
forth as we want nobody's actually engaging in tariffs period is that on
the table is that for real could we envision a relationship with China where
we say the heck with all these tariffs on both sides well I'm with you I'd like
to tear down all the barriers tariffs and non-tariff I think that's good for
economic growth and look at the moment I mean there is no deal we're just really
starting out this process but we're moving in that direction I mean I think
that's the best part and my argument here is you know I'm a growth guy so
just think of this for a minute if the Chinese would knock down their tariffs
there are other barriers there are technology issues and so forth let
Americans sell you know we are very competitive right now with tax reform
and deregulation and so forth we are capital rich all of a sudden we will
sell tons more goods as exports if they let us and that's a great way to reduce
the trade deficit it's a growth solution and by the by it will help China and
night.the by it will help the rest of the world so this these talks are very
important I don't want to come to conclusions deals haven't been met we're
heavy into it on both sides all want to say is there is a there's a lot
of optimism on the US side that frankly I didn't see when we first started this
a few weeks ago well that's good that's exciting I like hearing that
you
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