Return to Transcripts main page


U.S., Canada and Mexico Agree to Replace NAFTA; Trump Speaks a New Trade Agreement with Canada and Mexico;

Aired October 1, 2018 - 11:00   ET


[11:00:00] BECKY ANDERSON, CNN HOST: 7:00 in the UAE. Hello and welcome. You're watching CONNECT THE WORLD with me, Becky Anderson.

It took more than a year and came down to the wire. But now there is a new North American Free Trade Agreement after Canada agreed to sign onto a

revised deal between the U.S. and Mexico. Officials say it gives U.S. farmers greater access to Canadian markets and it addresses Canadian

concerns about U.S. tariffs.

Now it also helps the U.S. President fulfill one of his campaign pledges. Before being elected, Donald Trump vowed to renegotiate NAFTA calling it,

quote, the worst deal maybe ever signed. We are expected Mr. Trump to speak on the new trade deal any minute. And when we get him live, we will bring

him to you.

It's a rare day indeed when we hear a trade deal with the U.S. front and center as a win-win-win deal. Let's see how this is all playing out in

Washington and its effect on global markets. Sarah Westwood live in Washington for you. In New York, Cristina Alesci and joining me here in Abu

Dhabi is John Defterios. Sarah, let's start with you. Trump hailing this a wonderful and historic trade deal with Canada and Mexico. It certainly

ticks a box on a big campaign promise. So, explain just why this is such a big deal.

SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: Well, for the Trump administration its economic agenda has more or less produced a lot of the

things said it would, tax cuts, deregulation, but trade was a big area of vulnerability for the president. Because so far, his policy of imposing

tariffs on countries, even countries that are our allies like Canada and Mexico, had not led to the kind of benefit he was promising. This is one of

the first breakthroughs we've seen from the Trump administration on the trade front.

It gives Trump the ability to take a victory lap and it gives him the ability to say that perhaps some patience when it comes to the rest of his

trade agenda, particularly when you're talking about tariffs imposed against Chinese goods and goods from the European Union could yield the

same kind of successful results. So, for President Trump, this gives him the ability to maybe ameliorate some of those concerns that surround other

aspects of his trade agenda.

ANDERSON: And for investors, Cristina, of course whose nemesis is uncertainty across markets, it looks like they are buying into this. The

Dow Jones up 1 percent. I mean, look, farmers and auto executives we are told should understandably be delighted. Still aluminum companies perhaps

not as much. Just explain why.

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: So, both investors on Wall Street and Republican lawmakers are breathing a sigh of relief this morning

that they are not reviewing an agreement that is just between the U.S. and Mexico. This deal, of course, preserves the trilateral nature of NAFTA and

that is why the market is rallying. Just to get into the details a little bit, Canada will ease protections on its dairy market which is why this

deal, at least the administration will say, benefits the agriculture industry. In return the U.S. will save Canada from some of those high auto

tariffs that were under consideration.

Look, it does eliminate uncertainty. And that will free up some investment maybe that was sitting on the sidelines of these companies waiting to be

deployed until they got the broad strokes that the executives received the broad strokes of this NAFTA deal. But make no mistake about it, the

administration will tout this as a huge victory. And Trump is likely to sell this as an entirely new deal. While there is an element of an upgrade

here to NAFTA, and there are certainly new elements of it. It is not an entirely new deal. But he will sell it as such. And that's likely what

we're going to hear from him.

Of course, Congress is going to have to take a look at this. I was talking to congressional aides who are reviewing the document and the agreement


[11:05:00] We'll see what Republicans say about this, but they do have questions about those steel and aluminum tariffs and whether or not that

dispute will be resolved between the U.S. and Canada.

ANDERSON: John, let's be fair here. It's not just the Trump administration who will be touting this as a big deal. We're hearing from the other two

parties on this that this is a win-win deal.

JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: Well, there was a lot to lose. This is a $1.2 trillion in trade every year. It's a market of nearly

500 million consumers. It's a big, big player. And that nobody wanted it to unravel. Let's not forget he went head-to-head with Mexico wanting to build

the wall. He wanted to hit the deadline before the end of the year, before we had a new President who's probably not as user friendly. And I think

this is a big boom domestically for Donald Trump. Plays to his base for both the automakers and the auto workers. The UAW, the United Auto Workers

is a big base for Donald Trump. Access for the dairy farmers plays well in the Midwest going forward.

But the big point is, this is classic Trump, whether he's arguing with NATO, arguing with North Korea, arguing with the European Union. He takes

it to the very end, then he walks away and says, look, I got something for America, making America great again. Now to be determined -- and I think

this is what the market has in the backdrop -- what happens to China with $350 billion in tariffs, they'll go up to 25 percent at the end of the

year. And Iran, he's taking very a hard line with Iran and says he's willing to talk. It doesn't look like that at this stage --

ANDERSON: While Trump will want to be seen as the arch negotiator here. Sara, let's get back to you as we look at live pictures as we await the

news conference that Donald Trump will be holding. You're in the briefing room, and it seems though as were suggesting, here is the arch negotiator

who will love this win-win-win situation. He took it to the wire as John rightly pointed out. In the background it appears that Jared Kushner, his

son-in-law, is the man being touted as a man who really pulled this off. Just explain what you know about Kushner's role in all of this.

WESTWOOD: Right, my colleague Jeremy Diamond is reporting that Jared Kushner played an instrumental role in salvaging what at one point looked

like doomed trade talks, when Canada was starting to suspect that they would walk away from this whole process without a deal that was acceptable

to all parties. But Jared Kushner has a great relationship with Justin Trudeau, the Prime Minister of Canada's chief of staff, that allowed them

to help smooth over some of the speed bumps that the Canadian and American negotiators were encountering.

They worked through the weekend right up to the wire to get a deal in place by the congressional deadline that the U.S. was facing. Now they have 60

days to look at the text of that deal and put their stamp of approval on it before the new incoming administration in Mexico gets in place. And that

way it can be assured that this deal will be the law of the land before that new administration takes over.

ANDERSON: We've just seen Steve Mnuchin arrive in the Rose Garden, now awaiting the arrival of Donald Trump. And while we wait for the U.S.

president, Sara, just how important is it that this deal was pulled off just weeks away from the midterms and how important will this deal be in

the narrative for Republicans as they get set to play their role in those midterms.

WESTWOOD: Well it's hard to overstate the significance to trade to President Trump's entire agenda. It's one of his longest held beliefs. He's

been talking about unfair trade deals for years, long before he ever toyed with running for President. And this gives him another plank in his

platform of winning that he's been trying to spin heading into the midterms. Claiming that he's won a lot of victories against elites in

Washington who didn't believe he could notch them. Trade is a great example where a lot of experts were saying a renegotiation of NAFTA couldn't be

done, that there weren't going to be favorable terms for all sides here. President Trump can tout these changes, however cosmetic they may end up

being in the end, to say he that won a victory that people doubted. And that's central to his whole appeal.


DEFTERIOS: It goes beyond just that. If you look at the auto agreement, it's a win, but not a huge win to take it to the wall. They're looking at

75 percent local content in North America from 62 percent today. Is that going to create a lot more jobs? He's basically saying a third of every car

that's going to be produced has to have an employee making $16 or more. So, this will hurt the auto workers south of the border, and the global supply

chain, this is going to be something difficult to implement. And in fact, it won't come into place until 2020 when he runs for re-election as


ANDERSON: Cristina, we can talk about uncertainty being the nemesis of the stock markets. We see the market up some 1 percent on this.

[11:10:00] They seem to like -- well they certainly don't dislike what they are seeing. But you made the point that the devil will be in the detail.

And one Republican senator for Texas today saying this, and I quote, millions of American jobs are supported by NAFTA, and in Texas it's the

cornerstone of our economy.

This agreement is a positive step towards maintaining a strong unified North American economy. And he says -- and I think this is important -- I

look forward to reviewing the details.

ALESCI: That's right. And I believe the same lawmaker raised the issue that the steel and aluminum dispute between the two countries still has to be

resolved. Look, at the end of the day when it comes to uncertainty, investors certainly applauding this announcement today because it preserves

the trilateral nature of NAFTA.

I think what is important to note is that a lot of investors and economists and strategists are looking at this and saying, OK, what does this mean for

the elephant in the room? What does this mean or indicate about future negotiations with China? That is the big overhang in the market. That is

what people on Wall Street and in the halls of Congress are paying attention to. Can we see this or should we see this as an indication that

the Trump administration -- despite all the bluster about trade, despite the President's deeply held beliefs that the U.S. has signed and been

abiding by unfair trade rules -- trade deals, aside from all of that, will he, at the end of the day, come to the table and make an agreement with our

largest trading partners? And I think that's what most investors and strategists and economists are looking at.

ANDERSON: Sarah, less and elephant more are herd, so far as Washington is concerned when it comes to what has been overshadowing things of late. That

being the Kavanaugh hearings. One assumes that the Trump administration will welcome this deal this week given that last week was completely

overshadowed by what was going on in those hearings. What do we know to date?

WESTWOOD: Right now, the White House has completely lost control it seems of the Kavanaugh situation. The FBI is investigating Trump's Supreme Court

nominee. And while we know that the White House technically set the parameters for what that investigation would look like, those were really

dictated by the undecided Republican senators who are still weighing whether they will support Brett Kavanaugh. And it was those three Senators,

Susan Collins, Lisa Murkowski, Jeff Flake, all Republicans, who decided that they wouldn't be able to approve Trump's Supreme Court pick until that

investigation was completed.

Now the Trump administration is sort of in a holding pattern. They're trying to keep their powder dry until that investigation is done. They

imposed a one-week time limit on it. So, by Friday the Senate is hoping to have an up or down vote on that nominee, and the Trump White House being

really careful not to say or do anything right now that could give the appearance that they are putting their thumb on the scale in terms of that

FBI investigation anymore more than that appearance already exists. Because, yes, the White House did put restraints on that investigation.

Sarah, Cristina, and John stand by, we're going to take a very short break. We are awaiting the arrival in the Rose Garden in Washington of the U.S.

President. You're watching CONNECT THE WORLD. I'm Becky Anderson live for you in Abu Dhabi. Much more after this.


ANDERSON: We are back here awaiting the U.S. President to arrive in the Rose Garden. Well the group who are with him are there. Jared Kushner has

just joined those gathered in the Rose Garden in Washington. We are expected Donald Trump to speak on what is this new trade agreement. It took

more than a year, came down to the wire. But there is now a new North American Free Trade Agreement after Canada agreed to sign onto a revised

deal between the U.S. and Mexico.

Officials say it gives U.S. farmers greater access to Canadian markets and it addresses, in turn, Canadian concerns about U.S. tariffs. Now, it also

helps the U.S. President fulfill one of his big campaign pledges. Before being elected, you may remember Donald Trump vowed to renegotiate NAFTA

calling it, quote, the worst deal maybe ever signed.

We are expecting Mr. Trump to speak on this new trade deal any minute now. I still got Cristina Alesci in New York, John Defterios with me here in Abu

Dhabi. Nearly the worst deal, of course -- oh, nearly deal, of course, the very worst deal was the Iran deal, which was also scrapped at this point.

It's an interesting one, isn't it? As we await the arrival of the U.S. President, let's just remind ourselves what he's got out of this -- what he

will claim is a new deal effectively, some revisions of an old deal.

DEFTERIOS: Yes, in fact it goes by the It goes by the UMCA -- USMCA, right. It's almost like, the United States Marine Corps. In fact, he was going to

call it the USMC but added the "A" for CA as in Canada. So, it has a new name, he walks away This was signed in 1994, the same year, by the way,

that the World Trade Organization or WTO, another organization he doesn't like, came into effect. We'll see what he does in terms of follow-up in

terms of reforms within the WTO.

Specifically, to your point, he can go to the automakers and say, look, you'll get more work going forward now because I'm saying a minimum

requirement on hourly wages, local content of 75 percent. A less sexy issue, but a very important issue to U.S. industry and why they like Donald

Trump and not just lower taxes is intellectual property. Now the U.S. loses almost half a trillion a year on infringements against patents. Whether

it's high-technology, biotechnology or financial services. He was dead set about fighting against the loss of I.P. every year. You can go back to his

base on Wall Street and say, look, I went to the wall, I protected this on intellectual property, whether it's in Latin America, Africa or Asia,

particularly with China. That's a very sensitive issue.

ANDERSON: Listen up, Beijing. Cristina, will be the message from this. They'll work with us or take you to the wire, or work with us you might get

something out of the states if this is about making America great again, correct?

ALESCI: That's right. That may be the message that the President is trying to --

ANDERSON: Stand by. I'm going to stop you. Because U.S. President is about to start.

(President Trump on New Trade Deal with Canada and Mexico, New Conference)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Thank you. Thank you very much. Please sit down. It's really great to see everybody on this

beautiful, beautiful day in Washington, D.C. Some people say the swamp, but I will not say that today. I refuse. This is too important, what we're

doing. One of the most important deal and the most important trade deal we've ever made by far.

I wanted to thank Senator Joni Ernst for being here. Joni, thank you very much -- of Iowa. And I'll be there very soon. We'll be doing something very

important in Iowa.

[11:20:00] But this is maybe more important than all of it put together, right, Joni? So, I want to thank you for being here. Congressman Holding,

Congressman Roe, Congressman Newhouse and Congressman Meadows, thank you all for being here. We very much appreciate it. You've been very

instrumental. Thank you.

I am thrilled to speak to the American people to share truly historic news for our nation and in deed for the world. I want to thank Vice President

Pence for joining us this morning. It's my great honor to announce that we have successfully completed negotiations on a brand-new deal to terminate

and replace NAFTA and the NAFTA trade agreements with an incredible new U.S.-Mexico-Canada agreement called USMCA. It sort of just works. MCA --

USMCA. That will be the name I guess that 99 percent of the time we'll be hearing, USMCA. It has a good ring to it.

I have long contended that NAFTA was perhaps the worst trade deal ever made. Since NAFTA's adoption the United States racked up trade deficits

totaling more than $2 trillion. And it's a much higher number than that. With Canada and Mexico, it lost vast amounts of money and lost 4.1 million

manufacturing jobs and one in four auto jobs. We lost about 25 percent of our auto jobs, even more than that.

Throughout the campaign I promised to renegotiate NAFTA, and today we have kept that promise. But for 25 years as a civilian, as a businessman, I used

to say how could anybody have signed a deal like NAFTA. And I watched New England and so many other places where I was, just the factories were

leaving, the jobs were leaving. People were being fired, and we can't have that.

So, we have negotiated this new agreement based on the principle of fairness and reciprocity. To me it's the most important word in trade.

Because we've been treated so unfairly by so many nations all over the world. And we're changing that. We just signed a much better deal with

South Korea. We had a horrible, horrible deal. And we just signed it at the United Nations. And that's worked out well. And they're happy. We're happy.

It's good for jobs. Good for a lot of things.

When that deal was signed, they said 250,000 jobs will be given by signing this transaction. And they were right. I've said it before, they were

right, 250,000 jobs to South Korea, not to the United States. So that's changed and very much for the better. This one is a brand-new deal.

The agreement will govern nearly 1.2 trillion in trade which makes it the biggest trade deal in the United States history. I want to congratulate

U.S. trade representative, Bob Lighthizer, who has worked -- nobody understands how hard he's worked.

No matter when you called him, he was in the office or he was in somebody else's office doing the same thing. Bob Lighthizer, he's great. I've heard

it for years. I said, if I ever do this, I want to get Lighthizer to represent us because he felt the way I did. And the entire team at the USTR

standing behind me and some right here in the audience, I want to thank you all. Fantastic job. Peter Navarro, everybody, thank you all. Thank you.

Fantastic group of people. They love our country.

I also want to thank Secretary Mnuchin, Secretary Ross, Secretary Nielsen, Secretary Purdue, Jared Kushner, Peter Navarro and the United States

ambassador to Canada, Kelly Kraft, thank you. Thank you, Kelly.

I also want to thank President Pena Nieto of Mexico. We had a few disagreements, but I really like him a lot. I think he may like me. I'm not

sure. But I think he's a terrific person. And he'll be leaving soon, but he's done a good job and wonderful, wonderful person. And the Mexican

President elect Lopez Obrador, who has given his support to this agreement. We're developing a really good relationship which I think is very important

for our country, frankly, and for Mexico.

[11:25:00] So they work together on this. This was done by both. I said, look, I don't want to sign an agreement and then a new President comes in.

They don't like it and we have difficulty. They worked very much together on it. And I appreciate it from both. I have to certainly give my highest

regards to Prime Minister of Canada, Justin Trudeau. A lot of stories came out about Justin and I have difficulty together, and we did over the trade

deal. But I'll tell you it's turned out to be a very, very good deal for both and a very, very good deal for all three. It puts us in a position

that we've never been in before. It's very good when you look at the world and what the world is doing and when you look at the unfair trade practices

that countries are using against the United States. This is a terrific deal for all of us.

Once approve by Congress, this new deal will be the most modern, up to date and balanced trade agreement in the history of our country with the most

advanced protections for workers ever developed. If you look at the reviews, people that would normally not under any circumstances say good

things because automatically they have to say bad. Even some Democrats say that's amazing. We had some -- they haven't been given the sound bites yet

I guess.

But actually, you had some Democrats say this is really amazing if he really got all of that. But by tomorrow I suspect they'll change their

tune. But that's OK. Because people know how good it is. It's an amazing deal for a lot of people. Likewise, it will be the most advanced trade deal

in the world with ambitious provisions on the digital economy, patents -- very important -- financial services and other areas where the United

States has a strong competitive advantage.

Mexico and Canada have agreed to strong new labor protections, environmental protections and new protections for intellectual property. So

important. This new deal is an especially great victory for our farmers. Our farmers have gone through a lot over the last 15 years. They've been

taken advantage of by everybody. Prices have gone way down and we're working on some other deals that will make them very happy, also. But this

is a very, very big deal for our farmers.

Mexico and Canada will be opened up a lot more than they are. And I think they'll be a better spirit between the three countries which is important

for our farmers. The agreement will give our farmers and ranchers far greater access to sell American-grown produce in Mexico and in Canada. The

deal includes a substantial increase in our farmers' opportunities to export American wheat, poultry, eggs, and dairy including milk, butter,

cheese, yogurt and ice cream to name a few. I want to be very specific. I want to be very specific. Right. And many other products.

But those products were not really being treated fairly as far as those that work so hard to produce them. And now they're going to be treated

fairly. These measures will support many hundreds of thousands of American jobs.

This is also a historic win for American manufacturers and American auto workers who have been treated so badly. We've lost so many jobs over the

years under NAFTA. Under the current new deal, and if you look at the current NAFTA deal, the new deal is taking care of all of these problems

because NAFTA, foreign companies have been allowed to manufacture many of their parts overseas, ship them to Mexico and Canada for assembly and send

their foreign-made cars into the United States with no tax. So, we let all our people go, we fire everybody, they make cars, they make products, they

make everything in another country. They send them into the United States, no tax.

And the cost is very little difference. Sometimes it's more for those people that like to talk about cost. With this agreement we are closing all

these terrible loopholes. They're closed. They're gone. They were a disaster.

For example, we're requiring a large portion of every car to be made by high-wage workers which will greatly reduce foreign outsourcing which was a

tremendous problem. It means more auto parts and automobiles will be manufactured inside the United States. We will be manufacturing many more

cars, and our companies won't be leaving the United States, firing their workers and building their cars elsewhere.

[11:30:20] There's no longer that incentive. Before under the NAFTA deal they had that incentive. They have the opposite incentive now. We're not

going to be losing our companies. To me that was the most important thing. I don't want to see our companies leave and fire our workers, and our

workers never get jobs to replace those jobs. Those days are over.

This deal will also impose new standards requiring at least 75 percent of every automobile to be made in North America in order to qualify for the

privilege of free access to our markets. And that's what it is. It's a privilege. We don't take it as a privilege. We don't take it as a

privilege. It's a privilege for them to do business with us. And I'm not talking about Mexico -- I'm talking about everybody. Everybody. It's a

privilege for China to do business with us. It's a privilege for the European Union who has treated us very badly, but that's coming along, to

do business with us. Japan, every country. It's a privilege for them to come in and attack the piggy bank.

In this we will have a result of much more happening right here in the United States. It means more than anything else, far more American jobs,

and these are high quality jobs. There are also strong provisions to enforce what's called the rules of origin requirements. This will

incentivize billions of dollars in new purchases of U.S.-made automobiles. Once approved, this will be a new dawn for the American auto industry and

for the American auto worker. They will see. They understand.

They voted for us in large numbers, even though their leadership always goes Democrat. A couple of them said to me, I don't know how I can do it

again. Many of them, the leaders would back Democrats and would tell me you're going to get most of the votes from union workers, and we got most

of the votes from workers, period. But the American auto worker was very much behind what we were doing as one primary aspect.

It will transform North America back into a manufacturing powerhouse. If you remember the previous administration said we're not going to have

manufacturing jobs anymore essentially. We're not going to make things anymore? No. Just the opposite. We are going to be a manufacturing

powerhouse that allow us to reclaim a supply chain that has been offshored to the world because of unfair trade issues.

We also provide brand new intellectual property protections for biologic drugs which will make North America a haven for medical innovation and

development. We want our drugs to be made here. When you talk prescription drugs, we don't like getting them from foreign countries. We don't know

what's happening with those drugs. How they're being made, too important.

This landmark agreement will send cash and jobs pouring into the United States and into North America, good for Canada, good for Mexico. Instead of

jobs leaving for overseas they will be returning back home. And we've already had it. We have many, many car companies.

I was with Prime Minister Abe of Japan, he said we have sent many car companies to the United States over the last year and a half. It's true.

And big expansions. And very importantly he said many more are coming because they have an incentive now to be here.

People want to be back in the United States again. As I say, the United States is respected again, but it's also respected as to trade and

industry. This is a truly extraordinary agreement for the United States, Canada and Mexico. President Pena Nieto, it's so important that the

President and I have developed this sort of a bond, a bond on trade.

Pena Nieto, a man that has done a very good job for Mexico in terms of trade, and Prime Minister Trudeau who I just spoke to, just spoke to both

of them a little while ago. They love their countries. They want to do right for their countries and that's what they've done. And we fully formed

-- if you look at this agreement, we've formed a great partnership with Mexico and with Canada, and I plan to sign the agreement by the end of


I then will submit it for approval to Congress where in theory there should be no trouble, but anything you submit to Congress is trouble. No matter

what. The single greatest agreement ever signed . They'll say, well, you know, Trump likes it therefore we're not going to approve it because that

will be good for the Republicans. So, therefore, we can't approve it.

[11:35:00] But it will be sent to Congress pursuant to the Trade Promotion Authority Act. This agreement follows on the heels of our successful

completion of a new and balanced trade deal with South Korea. Tremendous difference in that deal from what it was. It was a disaster, as I said. To

improve the old deal, that it kills so many jobs.

It also follows on our announcement of a new trade negotiation with Japan. Japan would never negotiate with the United States. They'd say we're not

goings to negotiate. They told the previous administration we're not going to negotiate. I said you don't have to negotiate, but we're going to put a

very, very substantial tax on your cars if you don't. By the way, without tariffs, we wouldn't be talking about a deal, just for those babies out

there who keep talking about tariffs. That includes Congress. Oh, please don't charge tariffs.

Without tariffs, you wouldn't be -- we wouldn't be standing here. I can tell you, Bob and all these folks would not be standing here right now. And

we're totally prepared to do that if they don't negotiate. But Japan is wanting to negotiate. Actually, they called about three weeks ago. And he's

a terrific man. And a terrific -- just had a tremendous victory. And they said we'd like to start negotiations immediately.

India, which is the tariff king. They called us and they say we want to start negotiations immediately. When Bob Lighthizer said, what happened? He

would never do this. They said no, we want to keep your President happy. Isn't that nice? Isn't that nice? It's true. They have to keep us happy.

Because they understand that we're wise as to what's happening. India charges tariffs of 100 percent. And then if we want to put a tariff of 25

percent on -- people will call from Congress, but that's not free trade. And I'd look back to people and say where do these people come from. Where

they come from?

So, because of the power of tariffs and the power that we have with tariffs, we in many cases won't even have to use them. That's how powerful

they are and how good they are. But in many cases, we're not going to have to use them. In many cases, countries that are charging massive tariffs are

eliminating those tariffs. As you know, we have $250 billion at 25 percent interest with China right now. And we can go $267 billion more, and China

wants to talk very badly. And I said, frankly, it's too early to talk. Can't talk now because they're not ready.

Because they've been ripping us for so many years. It doesn't happen that quickly. And if politically people force it too quickly, you're not going

to make the right deal for our workers and for our country. But China wants to talk. And we want to talk to them. And we want them to help us with

North Korea. We want them to continue to help us with North Korea. That's very important.

The European Union has been very tough of the United States. Last year and for many years they've lost in the vicinity of $150 billion a year. They

have massive trade barriers and they didn't want to come. They didn't want to talk. Jean Claude, great business person, and head of the European

Union, Jean Claude, my friend. I say, Jean Claude we want to make a deal. He goes no, no, no, we are very happy.

I said, you may be happy but I'm not happy. Because we have one of the worst deals of any group, we have one of the worst deals with the European

Union. And they just didn't want to come because they were happy with the deal. I said, but we're not happy with the deal. And finally, after going

through a whole process. I said, look, we're going to put a tax of 20 percent on all the millions of Mercedes and BMWs, all of because of the

millions and millions of cars that they sell here that they won't take over here. Farm product that they won't take over there because there are

barriers. You can't sell. You're not allowed to. Our farmers aren't allowed to sell over there many of their products, much of their products, most of


And so, I announced that were going to put a 20 percent tariff, could be 25 on their cars coming in. And they immediately called and said we'd like to

start negotiations, and we're having a successful negotiation. We'll see what happens. Who knows? I always say, who knows. But we'll see. I have a

feeling we'll be successful.

A pillar of national security is economic security and trade. National security is not when we lose hundreds of billions of dollars a year. Over

the last five years we've averaged $800 billion a year loss on trade. How dumb is that? $800 billion. This group doesn't know about those numbers. I

don't even want them to hear those numbers.

[11:40:00] But the United States in its trade deals has lost on average almost $800 billion a year. That's dealing with China, dealing with

European Union, with everybody, Japan, Mexico, Canada, everybody. And we're not going to allow that to happen. But we have to have a strong

manufacturing base and manufacturing sector. We need a thriving economy. Those are all really essential ingredients to national security.

We can't allow what's been happening over the last 25 years to happen. We are building our military like never before. It'll be the strongest it ever

was. And all of those rockets that are made and rockets and missiles and ships, they're all being made in the United States. Jobs.

Our economy is booming like never before. Jobless claims are at a 50-year low. The stock market is at an all-time high -- think of that. Over 50

percent since my election -- 50 percent. People -- the 401(k)s, they have 401(k)s and they were dying with them for years. Now they're so happy.

I was telling the story I often tell of a policeman in New York who came up, his wife was always very upset with him as an investor because he

wasn't doing well with the 401(k)s. Now she thinks he's a genius because the numbers are so crazy. But we're up over 50 percent since the election.

And you've heard me say this many times, but African-American unemployment, Asian unemployment, Hispanic unemployment is at record lows in history,

not, you know, for the last two years, the history of our country, African- American, Asian, Hispanic. Young people without high school diplomas, all at historic -- that's a very important sector, all at historic lows. The

lowest in history. It's really something that's great.

This is helping so much with people who that get out of prison. We have a tremendous problem. People come out of prison they can't get a job.

Employers don't want to hire them. The economy is so good they're hiring them and they're turning out to be incredible workers. They're really given

a second. They're really given a second -- given a third chance in some cases.

But I've had numerous employers come up and say, I'll tell you what, I've taken people who were in prison and we've hired them -- he wouldn't have

done this in a normal economy or bad economy, only in this kind of an economy. And now he's like the biggest fan. One man in particular has taken

numerous people. He said most of them have been unbelievable. All you can ask is most. But most of them have been unbelievable. That's a great thing.

That's a really great thing. It gives them a chance.

So, before we take questions, I want to extend our warmest condolences to the country of Indonesia. A friend of mine, we're going to be calling up

the leader, who is a great leader indeed, but they got hit by a giant tsunami like people have not seen. This part of the world hasn't seen it so

much fortunately. They say that's the worst of all. You look at the tornadoes, the hurricanes, you look at all of the different natural

disasters. A friend of mine who studies natural disasters -- I don't know why he does that, but he does. He says that tsunami is the worst of all and

they got hit very hard and probably thousands of people killed. We have already sent a lot of first responders and military and others to help.

It's a really bad, bad situation.

And finally, before closing, I want to send our thoughts and prayers to the victims of the Las Vegas shooting. That was a horrible, horrible time in

the life of our country. It took place exactly one year ago today. All of America is grieving for the lives lost and for the families they left

behind. So, to all those families and to the people of Las Vegas, we love you, we are with you, we are working with you very hard. That was a

terrible, terrible event. So, thank you very much for that.

I want to ask Bob Lighthizer who is just a terrific individual as well as a man that knows a lot about this subject, to come up and say a word about

the USMCA, the new agreement.

[11:45:01] And if you have any questions, we'll take some questions after that. Please, Bob.

ROBERT LIGHTHIZER, U.S. TRADE REPRESENTATIVE: Thank you, Mr. President. Before I start, I would just like to give a vignette because I think it

says something about working for the president. So, August 16 of last year we started this process. And I'm at a hotel in Washington and there's like,

you know, hundreds and hundreds of people waiting to have the introduction of myself and my two counterparts, one from Canada and one from the United

States. And I'm getting we're lined up and I get a call and it says the President wants to talk to you.

So, I go in a little anteroom and I get on the cell phone. The President starts talking. Everybody's kind of waiting. And he's talking and he's

going through what he wants to get done in NAFTA, his problems with it, all of which he's quite familiar with. And then he finally says two things

which I thought were telling.

One he said, Bob I will back you up like no other USTR has been backed up in history. And then the second thing -- he did that, by the way. And then

the second thing he said was, he said now go out there and have fun. I thought, well, it's probably not going to be as much fun from my side as it

will be from your side. But I'm proud to be on your team and I really am proud to follow you through this and the other trade changes.

As you have said, Mr. President, this agreement is historic in many ways, the USMCA will cover $1.2 trillion, easily making it the biggest agreement

in history. We have done this in 14 months. And believe me in trade negotiating terms that's like warp speed. When we began these negotiations

last year, the President's instructions to me were precise and straightforward, protect American workers, fight for our farmers and

ranchers, preserve America's competitive innovation edge, secure greater access for our businesses and above all, bring back jobs to America.

I think we have succeeded with this agreement. The USMCA will accelerate the manufacturing renaissance our country has enjoyed under President

Trump. It will bring our trading relationship with Mexico and Canada into the 21st century, and it will protect America's competitive age and digital

innovation across the economy.

The new agreement will also serve as a template for our trade agreements under the Trump administration in the future. This paradigm-shifting model

rests on three pillars. First is fairness. We have negotiated stronger rules of origin for automobiles which will bring billions of dollars of

manufacturing back to America.

We have secured greater market access for our farmers and ranchers. We've agreed to unprecedented labor standards that will help level the playing

field for our workers. We've also agreed to a first-of-its-kind review and termination provision which will assure the USMCA unlike NAFTA will not

become unbalanced and out of date.

The second pillar will consist of a host of ambitious provisions on digital trade, intellectual property, services including financial services

designed to protect our competitive edge.

The third pillar consists of new provisions designed to eliminate unfair trade practices including strong new disciplines on state-owned

enterprises, on currency manipulation, relations with non-market economies and much, much more. We wouldn't be here today if it were not for several

people who contributed so much to this endeavor. First, the President's key adviser and my good friend Jared Kushner, was my partner in leading the

U.S. negotiating team. I've said before and I'll say again this agreement would not have happened if it wasn't for Jared. So, thank you very much.

I'd like to thank my counterparts, Secretary Guajardo and Minister Freeland, as well as other Mexican and Canadian government officials

including the Secretary Vida Gray (ph), and Ambassador Ciadi (ph), Jerry Butts and Katie Telford of Canada and so many more. I'd like to thank the

wonderful staff at USTR, many of whom are on here. I'd like to think of us a little bit like we were the Marine Corps and so I like the name

particularly of this agreement.

USTR is about 250 people, and they're all devoted and all exceptional and they all work around the clock.

[11:50:00] Many of the people you're looking at spent more than one night in the office over the course of the last few weeks. And they have enormous

ability and this President has unleashed them.

Finally, I would like to thank President Trump. Your leadership, vision and grit made this agreement possible. No other person could have done it.

Millions of Americans will benefit for years to come because of this vision and probably even more important this grit. Thank you, sir.

TRUMP: Thank you very much. Thank you very much. Thank you very much, Bob. Thank you very much. Some questions? Yes, Steve, question?

UNIDENTIFIED MALE: Thank you, sir. You've had tensions with Prime Minister Trudeau.


UNIDENTIFIED MALE: How did that affect your ability to get this deal done?

TRUMP: I don't think it did. He's a professional. I'm a professional. We had very strong tensions. It was just an unfair deal, whether it was Mexico

or Canada, and now it's a fair deal for everybody. It's a much different deal. It's a brand-new deal. It's not NAFTA redone. It's a brand-new deal.

I just spoke with him. We have a great relationship and we're going to work as a partner.

Don't forget, the rest of the world is looking to take advantage of us and as a region, you might say, and we're going to work very closely together

with Canada and with Mexico because we'll be able to compete with anybody. We have things that nobody else has. We have energy that nobody else have.

We have timber that nobody else has. We have things that no other part of the world has to the extent that we have. So, we're going to do very well


I think we have -- there was a lot of tension, I will say, between -- he and I i think more specifically. It's all worked out. You know when it

ended? About 12:00 last night. But he's a good man. He's done a good job, and he loves the people of Canada.

UNIDENTIFIED MALE: You mentioned $267 billion and possible more tariffs on China. What does China need to do to avoid that?

TRUMP: Well, we'll see what happens with China. We have lost $375 billion in trade deficits. They have a surplus of $375 billion, with a "b", with

the United States. And it's been that way for years and years and years. I always say we rebuilt China. They took that money and they built fighter

jets and they built bridges. They built more bridges than we've built in the last hundred years probably, big ones like the George Washington

bridge, like big bridges. And I'm not going to take, you know -- look, I don't blame China. I blame our leadership. They should have never let that

happen. And I told that to President Xi. I said, you know, I was making a speech in China and I was really hitting China hard. And I'm in China. I

don't know if that's a good thing to do. But I looked at her and said, you know, I don't really blame you. I blame our leadership for allowing this to

happen. He knew exactly what I meant.

We had no deal with China. I asked one of the top people in China, a representative at the highest level who came to the Oval Office. I said,

let me ask you, how did this ever lap? He's a pro. So, he understands. He doesn't have to be cute. He said nobody ever did anything from the United

States. When we put on a 25 percent tariff on every car that comes from the United States into China, we thought we would be rebuked. We thought it

would be terrible. Nobody ever called. Nobody did anything. That was years ago. And we charged them nothing, 2.5 but we don't collect it. We do now,

by the way. But we don't collect the 2.5.

So, they charge 25, we charge essentially nothing. But I said, how did that happen? He said nobody ever called. We don't have a deal with China.

There's no deal. They do whatever they want.

So, we have a tremendous problem with theft of intellectual property with China. We have a lot of other problems with China. We have primarily trade

problems. And as you know, they're having a much more difficult time now. I don't want them to have a difficult time. And we're doing better than we've

ever done. Everybody talks about the tariffs. Oh, the tariffs, tariffs.

You know, tariffs ended in 1913, and they then went to a different system in 1918, totally unrelated. And then in 1928, you had the great depression.

For a lot of different reasons, not necessarily our country's fault, but a little built our country's fault. And then in the 1930s, they said we

better start charging some tariffs. We need money to come into our country again. OK. So I'm not advocating tariffs.

[11:55:00] I will tell you this, our steel industry -- Wilbur, is stronger than it's been in 25 years. This has taken six months because I charge for

the dumpers, they were dumping steel and dumping aluminum in our country. I charged 25 percent. That's a lot. It could be more, but that's a lot. And

if you look at U.S. Steel and Nucor. Nucor just announced a billion-dollar plant, brand-new, already started construction. U.S. Steel is building

eight or nine plants, they're expanding plants. I don't think there's any industry like what's happened to steel in the last nine months, ten months

since I really started doing what I'm doing. And that's been very pretty amazing. Aluminum, also.

So, and we need steel, we need steel for defense. What are we going to do, go and say, oh, we'll get steel from like another country? Can't do that.

We can't do that. So, we need steel and we need it badly for defense. I'm very proud of what's happened with the steel industry. OK. Question? Yes,

go ahead. Sure. She's shocked that I picked her. Like in a state of shock.

UNIDENTIFIED FEMALE: I'm not thinking, Mr. President.

TRUMP: That's OK, I know you're not thinking. You never do.


TRUMP: No, go ahead. Go ahead.

UNIDENTIFIED FEMALE: In a tweet this weekend, Mr. President, you said that it's incorrect to say you're limiting the scope of the FBI investigation --

What is that have to do a trade? TRUMP? I don't mind answering the question, but you know, I'd like to do the trade question.

UNIDENTIFIED FEMALE: It has to do with the other headline in the news which is the cabin on nomination.

TRUMP: I know but how about talking about trade and then we'll get to that. We'll do that a little bit later.

UNIDENTIFIED FEMALE: Do you think the trade deal --

TRUMP: Anybody have trade -- go ahead.

UNIDENTIFIED FEMALE: Do you think your trade deal will pass through Congress, sir?

TRUMP: I think so. But you know, if it doesn't, we have lots of other alternatives. But I do think so, I think if they're fair, which is a big

question, but if it's fair on both sides, the Republicans love it. Industry loves it. Our country loves it. If it's fair, it will pass. I think it will

pass easily, really easily because it's a great deal. I mean, NAFTA passed, it's one of the worst deals I've ever seen. Inconceivable that it was made.

Fair question. Any other questions on trade? I'll get back to you on the other question.

UNIDENTIFIED FEMALE: I'd like to go forward with my Kavanaugh question --

TRUMP: Let's do that later, but I'll call you a second time. Go ahead, please. Thank you very much.

UNIDENTIFIED MALE: Thank you, Mr. President. You have described India as a tariff king. Can you explain a little bit?

TRUMP: India charges us tremendous tariffs. When we send Harley-Davidsons, motorcycles, other things to India, they charge very, very high tariffs.

And I've spoken to Prime Minister Modi and he's going to reduce them very substantially. Nobody ever spoke to these people. He said nobody ever spoke

to me. In other words, we've had leaders here -- I'm not, you know, trying to be overly dramatic. We've had Presidents of the United States, and trade

representatives, they never spoke to India.

Brazil is another one. That's a beauty. They charge us whatever they want. If you ask some of the companies, they say Brazil is among the toughest in

the world. Maybe the toughest in the world. We don't call and say you're treating our companies unfairly, you're treating our country unfairly. So,

India is a very, very high -- they really charge tremendously high tariffs. On motorcycles it was 100 percent tariff. So, you send a motorcycle into

India there's a 100 percent tariff. Now that's so high that it's like a barrier. In other words, who's going to buy it? It cost you so much.

Now they've already reduced that substantially but it's still too high. My relationship with India is great, with Prime Minister Modi is great. And

they're going to start doing a lot. They've already -- they're called us to make a deal. We didn't even call them. They called us to make a deal which

is like shocking to people. Yes, sir, go ahead.

UNIDENTIFIED MALE: I do have a second question on the Kavanaugh thing when you get back to it if you take that.

TRUMP: Let's go.

UNIDENTIFIED MALE: You'll take it now?

No, no.


TRUMP: First we'll do trade.

UNIDENTIFIED MALE: On trade. The question I have on trade, does this mean the end of tariffs, if you can spell that out, with Canada?


UNIDENTIFIED MALE: Do you think it will pass?

TRUMP: The steel is staying where it is, and aluminum. But it means we probably for the most part won't be having to use tariffs unless we're

unable to make a deal with the country. For instance, if we can't make a deal with the European Union, we will respectfully put tariffs on the cars.

The United States will take in billions and billions of dollars into its coffers. Isn't that nice? Because you don't hear that.

UNIDENTIFIED MALE: Only from Carl Sagan.

TRUMP: OK, yes, Sagan. But it will take in billions and billions of dollars. But really what's going to happen is they'll make the cars in the

United States. This way they don't have to pay the 25 or the 20 percent tax.

UNIDENTIFIED MALE: And could you spell out --

TRUMP: So, I don't think you're going to have to use the tariffs too often. But there will be cases where you have countries that are just absolutely

not willing to do what's fair and reciprocal, and in that case they'll pay tariffs. You know what? The United States will do very well.

UNIDENTIFIED MALE: Do you think it will pass in Canada and Mexico and more importantly here in the United States?

TRUMP: I don't know. All I can tell you is we made a deal. The highly respected Presidents and in the case of Canada the prime minister, are

satisfied with the deal it's good for Canada, good for Mexico. It's good for all three. This is a deal -- this is good for all three. And just that

fact makes it good for us. But this is good for all three.