Posted originally on CTH on December 13, 2025 | Sundance |
The geopolitical baseline for Europe is often determined by the economics of their situation. In 2024 approximately 408,000 cars from China were sold in Europe. For 2025 that number is now expected to exceed 700,000 units despite tariffs.
Previously we highlighted the short-term ramifications of the European Union push to force the sale of electric vehicle (EVs) upon the consumer base. {SEE HERE} EU automakers unable to meet the compliance goal began purchasing carbon credits to avoid stiff EU fines. Many of those carbon credits were purchased from Chinese automakers, who then turned around and started using the extra EU revenue to discount Chinese cars sold in Europe.
In essence, EU car companies started subsiding China to undercut their own market. An outcome of the EU chasing the ridiculous green energy project throughout the European free trade zone.
Now reports are beginning to surface of how the non-EV segment of the industry is being lost to less expensive Chinese hybrid autos that: (1) are much cheaper, (2) not bad in quality, and (3) are not subject to the 35% EV tariff rate.
The EU tariff applied to gasoline powered cars or hybrids from China is 10%. That tariff is not enough to stop the imports. The Chinese hybrid autos are substantially less than European car brands, and there’s no financial incentive for China to build auto plants in the EU zone especially when you consider the EU is subsidizing those cars by purchasing carbon credits.
When analyzed from a cost and consequence, the entire EU dynamic toward car companies is a little funny. However, for Germany this is a serious issue, and with the German industrial economy already stagnant – every impact to their auto industry only makes the situation worse.
When you overlay the big picture of their expensive “green energy” costs, the EU find themselves in an unescapable downward spiral. Quite literally, all commonsense seems to have been lost in their green energy chase.
By focusing on energy targets, specifically by trying to force production of European electric vehicles that are not favored by European car purchasers, the EU is shrinking their economy to the benefit of Beijing exploitation.
EUROPE – This year, sales of Chinese-made cars across the EU, UK, and EFTA are expected to exceed 700,000. This is up significantly from the 408,000 that were sold in 2024.
The surge comes despite the fact that additional tariffs of up to 35 percent, on top of the existing 10 percent import duty, were instated in November of last year.
Rather than dampen demand, the tariffs have simply redirected it. While the added fees specifically target EVs and extended-range electric vehicles, hybrid and internal combustion engine (ICE) models remain subject only to the base 10 percent tariff.
Predictably, Chinese brands have leaned into that category, shifting their European strategy toward models that sidestep the higher costs.
Thanks to significantly lower production costs, up to 30 percent cheaper than in Europe, it doesn’t make financial sense for these brands to relocate production just to serve a tariff-guarded market. Instead, they’re exploiting the gap. (read more)
The only Chinese auto plant current in the works for construction is in Hungary, not coincidentally the country with the most common sense as it applies to energy costs. BYD (Build Your Dream) is building a plant in Hungary expected to manufacture 150,000 units/yr.
While most EVs are generally best for short duration use, the Chinese hybrid vehicles are not a terrible build quality if you are an auto purchaser that changes vehicles frequently. We dodged a bullet by electing President Trump in 2024, because Joe Biden (Blackrock) had positioned the North American auto industry toward a similar fate as currently happening in Europe.
The Europeans and leftists in the U.S. scoffed at President Trump for rejecting the premise behind the Green New Deal, which included electric car mandates. Those same Europeans are now watching as their industrial economy collapses segment by segment; taken over by far cheaper Chinese industrial outputs.
Posted originally on CTH on December 8, 2025 | Sundance
President Trump holds a roundtable discussion with Agriculture Secretary Brooke Rollins and various farm state senators as he outlines $12 billion in support and subsidy for American farmers.
With energy prices lowered, the costs for natural gas, fertilizer, diesel and gasoline prices have fallen; however, food costs have remained high. President Trump announced with Brooke Rollins an initiative to help support American farmers with the intended objective to lower production costs from the field that will hopefully transfer to the fork.
Secretary Rollins and President Trump announce a $12 billion bridge subsidy to assist farmers with proactive planning for the 2026 planting season. The money is coming from revenue generated by tariffs, and row crop farming will be the first subsidies delivered. WATCH (media questions begin at 31:40):
Posted originally on CTH on December 6, 2025 | Sundance |
U.S. Trade Representative Jamieson Greer is questioned about the Trump administration strategy or lack thereof. “Yes, there’s a strategy,” Greer says in this new interview. “First of all, you don’t change 70 years of trade policy overnight. And second of all, when some people say, ‘Oh, well, this is chaos. What’s your strategy?’, what they really want to know is can we go back to how it was before? And that’s not going to happen.”
The interview is in an audio file presented by Politico and shared below. This is some really good information on the various free trade agreements and the regions represented by some of our largest trade partners. Well worth listening to as you go about your day and travels today. Embed below:
USTR Greer notes how the tariffs are being used, the upcoming Supreme Court decision, the need for congress to codify the tariff regime in legislation and the various regional strategies for the deployment of countervailing duties.
Posted originally on CTH on December 5, 2025 | Sundance
In the world of Trumpian geopolitical trade stuff, three issues are very interesting to watch. (1) The strategic reset with Russia which could break the official western construct of financial control. (2) The proactive and defensive positioning of Mexico (desperate attempt to retain economic attachment), and (3) the certain dissolution of the USMCA what Canadians call CUSMA.
Canadian media are starting to realize something we have talked about on these pages for years; President Trump intends to end the USMCA because the USMCA was used as a fracture point to eliminate NAFTA.
Wall Street, the U.S. Congress, the massive K-Street lobbying network around the U.S. Chamber of Commerce and the entire political apparatus of business and industry would never permit the end to NAFTA; too many trillions at stake. So, President Trump replaced NAFTA with the interim USMCA, which was better but factually more useful in elimination of the original.
Now, as we have discussed by highlighting President Trump’s no-so-subtle words on the issue, the Canadian media is realizing the USMCA will be dissolved in favor of two independently negotiated bilateral trade agreements; one with Canada and one with Mexico.
🚨MAJOR BREAKING
Trump signals that he could EXIT from USMCA entirely.
This is EXTINCTION LEVEL to Canada.
He going to do it. I have a strong feeling about this.
(CTV) – U.S. President Donald Trump could decide next year to withdraw from the Canada-United States-Mexico trade agreement (CUSMA), Politico reported on Thursday, citing U.S. Trade Representative Jamieson Greer.
“The president’s view is he only wants deals that are a good deal. The reason why we built a review period into CUSMA was in case we needed to revise it, review it or exit it,” Greer told Politico’s White House bureau chief Dasha Burns in a podcast episode that airs Friday.
Greer also raised the idea of negotiating separately with Canada and Mexico and dividing the agreement into two parts in the podcast, adding that he spoke with Trump about that possibility just this week.
The White House, Canadian and Mexican governments did not immediately respond to Reuters request for comment.
Trump on Wednesday said that the CUSMA agreement – which faces an upcoming review- will either be left to expire or another deal will be worked out.
The USMCA, which replaced the North American Free Trade Agreement in 2020 and was negotiated during Trump’s first term as president, requires the three countries to hold a joint review after six years. (link)
I have talked to a lot of Canadians on the issues of economics and trade. As a result, I can say with complete sincerity that not since the COVID-19 examples of New Zealand (lockdowns) and Australia (vaxx), has a nation engaged in such a level of mass cognitive dissonance as the govt of Canada on the issue of economics and trade – in the past few years. It is stunning.
To understand the reality of the situation Here’s an IN-DEPTH LINK. Apparently, few really understand the full scope of the issues.
For those who have followed along with the U.S-Canada trade positioning, the current status of conflict between the Trump administration and the government of Canada is not surprising. {GO DEEP}
Going all the way back to the replacement of NAFTA, with the USMCA, President Trump always said he did not favor multilateral trade deals with multiple countries; instead, he preferred bilateral free trade agreements.
Some people have construed the bilateral preference of President Trump to be the elimination of globalism in favor of nationalism in trade agreements.
While the outcome of the Trump approach indeed aligns with that theme, it is not specifically the objective of President Trump to eliminate global trade, but rather to focus on specific interests in trade that benefit the unique nature of each party involved.
As a result, the USMCA -or CUSMA as said in Canada- is not in alignment with a bilateral free trade agreement, and the conflicted differences between trade with Mexico and trade with Canada are an outcome of this dynamic. The solution is simply to eliminate the multilateral in favor of the bilateral approach. This is the objective of President Trump as expressed.
There is zero leverage on the Canadian side of the trade negotiation, zero.
There is nothing that Canada provides to the USA that the USA cannot create, produce or secure independently. The nature of the economic relationship is entirely lopsided, with the USA getting nothing in return for the massive outflow of U.S. dollars (USD).
Our trade relationship with Canada is based on the U.S. government simply liking our northern neighbor and giving them terms and conditions for their economy to benefit from proximity. Take the friendship out of the equation, which is key to understanding the polar political ideology of the two nations, and there is simply not much reciprocal trade benefit.
Take away the soft wood lumber, we have our own. Take away the oil, we have multitudes of domestic production options. Take away the minerals, again we have both our own unused capacities and enhanced trade agreements with other Free Trade Agreement nations.
Then look at the possibility of a strategic U.S-Russia economic alliance, and all those contracted icebreakers take on new meaning.
Some may think this is an overly harsh view of our Canadian friends. However, the Canadian majority believes in climate change and unfortunately leftist politicians control their industrial economy. Canada is in the middle of a mass formation psychosis. Canada needs to get hard, dispatch cultural Maxism and put deliberate men in charge.
A Canadian conservative is essentially a politically correct Mitt Romney; not strong enough to make a difference.
The best thing President Trump can do for our Canadian friends is to help strategic regions while their overall economy collapses around them. Then we hope guys like this surface to rebuild the Great White North.
Posted originally on CTH on December 3, 2025 | Sundance
In an effort to return common sense, practicality and affordability to the American consumer base for automobiles, President Trump announced the elimination of Joe Biden’s Corporate Average Fuel Economy (CAFE) standards for manufactured cars and trucks.
Under the auspices of the “Green New Deal”, the Biden administration mandated ridiculous quotas for EVs and demanded lower power combustible engines, or pay a climate change tax. These CAFE standards resulted in a surcharge for large vehicles, large engine autos and SUVs, and essentially bifurcated the auto consumer into those who could afford to pay for efficiency and stability, and those who could not.
“We’re officially terminating Joe Biden’s ridiculously burdensome, horrible actually, CAFE standards that impose expensive restrictions and all sorts of problems, gave all sorts of problems to automakers,” President Trump announced from the Oval Office. “It put tremendous upward pressure on car prices, combined with the insane electric vehicle mandate. Biden’s burdensome regulations helped cause the price of cars to soar more than 25%,” President Trump said. WATCH:
(Via White House) – DELIVERING A WIN FOR AMERICAN FAMILIES AND AUTOMAKERS: Today, President Donald J. Trump is delivering major relief to American families by resetting the Biden Administration’s costly and unlawful Corporate Average Fuel Economy (CAFE) standards.
President Trump is returning CAFE standards to levels that can actually be met with conventional gasoline and diesel vehicles. The Biden Administration standards imposed unrealistic fuel economy targets that effectively resulted in an electric vehicle (EV) mandate.
The Trump Administration’s reset of the CAFE standards ensures the program’s fidelity to the legal restrictions set forth by Congress.
The Biden standards broke the law by going far beyond the requirements that were mandated by Congress when it created the CAFE program.
SAVING AMERICAN FAMILIES MONEY: Today’s action represents an enormous win in response to the cost-of-living increases imposed on the economy by the Biden Administration.
The Biden Administration created extraordinarily stringent fuel economy standards for passenger cars and trucks, set at such aggressive levels that they were impossible to meet with available technologies for gas cars.
The Biden standards would have compelled widespread shifts to EVs that American consumers did not ask for, accompanied by significant cost-of-living increases. Since EVs are so expensive to build, automakers must sell them at a loss and make up the difference by significantly raising the sticker price of gas cars.
If President Trump had done nothing, the Biden standards would have raised the average cost of a new car by nearly $1,000, relative to the cost under the standards announced today.
President Trump’s actions will save American families $109 billion in total over the next five years. By helping more Americans buy newer, safer vehicles, this reset is projected to save more than 1,500 lives and prevent nearly a quarter-million serious injuries through 2050.
MARKING A CRITICAL BATTLE IN THE FIGHT AGAINST BIDEN’S HIDDEN COST-OF-LIVING INCREASES: The CAFE reset represents the latest action by President Trump to prevent the Biden EV-related policies from raising costs for Americans.
In June, President Trump signed a joint resolution to end the California EV mandates, which would have effectively been a 100% ban on new gas cars sold in the state by 2035 (with similar effects in 17 states that adopted California’s standards).
In July, President Trump signed into law the Working Families Tax Cuts Act, which set the civil penalty for violating CAFE standards to $0, protecting the U.S. auto manufacturing industry from significant fines.
Under President Trump, the Environmental Protection Agency (EPA) has also released its proposal to rescind the 2009 Endangerment Finding, which ignores Congress’ clear intent under the Clean Air Act and has been used to justify over $1 trillion in costs for the American consumers and economy.
Today’s action helps ensure that even if far-left Democrats return to power, the CAFE standards are sensible, so U.S. automakers are not held to infeasible standards.
Combined with auto loan interest deductibility for new made-in-the-USA vehicles, President Trump continues to deliver real relief that makes owning a safe, reliable car more affordable for every American family. (source)
Posted originally on CTH on November 20, 2025 | Sundance
The govt shutdown made a mess of the economic data surveying and statistical analysis generally needed for accurate snapshots of the economy. However, the Bureau of Labor and Statistics (BLS) was able to release the September jobs report data {SEE BLS REPORT HERE}.
The geopolitical trade reset continues delivering domestic economic fluctuations, as each sector and specific international dependency reacts to President Trump’s shifts and turns in targeted economic policy. The September jobs report caught the economic pundits off-guard, as it showed a much bigger gain in jobs than they expected.
As noted by MSM, “The US added 119,000 jobs in September, far more than the 53,000 economists expected, and unemployment unexpectedly increased to 4.4% from 4.3%.” President Trump’s immigration enforcement continues to capture and remove illegal alien workers from the U.S. economy. This is also driving up domestic wages.
Posted originally on CTH on November 20, 2025 | Sundance
President Donald Trump and Saudi Arabia Crown Prince Mohammed bin Salman attended a U.S-Saudi investment forum and delivered remarks to the assembled business audience.
Posted originally on CTH on November 14, 2025 | Sundance
President Trump held an impromptu press conference aboard Airforce One heading to Florida for the weekend. The audio is a little challenging, but the sound is better on the Forbes link than the White House link.
President Trump discusses his lowering the import tariffs against some products the USA doesn’t create. Additionally, President Trump notes his intention to sue the BBC for compensatory damages as a result of their manipulation of his J6 speech. WATCH:
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President Trump speaks at length about inflation. He is absolutely correct on the 2021 Biden cause and effect.
For those who did not pay attention to the details at the time when we were researching and writing about it, including the warnings and preparations that we suggested everyone should take – HERE IS A REMINDER LINK!<- That is what President Trump is trying to deal with.
Posted originally on CTH on November 14, 2025 | Sundance
President Donald Trump gave U.S. Trade Representative, Ambassador Jamieson Greer, all the tools and leverage needed to bring the Swiss govt to a substantive trade agreement. The pressure was too much to bear, so Switzerland quickly negotiated a deal.
In the background President Trump’s global trade reset has been seriously damaging for the Swiss industrial economy. The EU overall, Germany specifically and China, have stopped purchasing precision Swiss industrial machinery.
It’s not the direct tariffs against Swiss precision machinery itself that created the pressure, but rather the tariffs against nations who purchased the Swiss precision machinery.
China was a big purchaser of the Swiss machinery, until Beijing stole enough intellectual property to develop their own precision machining capacity. Slowly China didn’t need Switzerland.
Germany and the EU economy then began to contract as the Trump tariffs bit hard against their exports to the USA.
Simultaneously, Chinese EV production started replacing more expensive European EV production, and the tooling purchases within the auto industry began contracting within Switzerland.
As things unfolded, the forecast for the future of the Swiss economy started to become very clear; their precision industrial exports were going to continue contracting. Something needed to change, and fast.
Ambassador Jamieson Greer announces a major free trade agreement with Switzerland {SEE HERE} and the White House provides a fact sheet {SEE HERE}. A joint statement is then released:
Today, the United States of America (United States), the Swiss Confederation (Switzerland), and the Principality of Liechtenstein (Liechtenstein) (collectively, Participants) express through this Framework their intention to negotiate an Agreement on Fair, Balanced, and Reciprocal Trade (Agreement). Through the Agreement, the Participants intend to create a dynamic and balanced trading relationship on a reciprocal and mutually advantageous basis, with a view toward creating good, high-paying jobs and economic growth in their markets. The Participants share a desire to make trade fairer, easier, and more substantial. The Participants further share a desire to foster secure and resilient supply chains and a conducive business environment to attract high-quality and trusted investment. Switzerland intends to take action to balance its trade with the United States, including by purchasing U.S. goods, facilitating investment in the United States, and removing tariff and non-tariff barriers for U.S. goods. The Participants intend to immediately begin negotiations of the Agreement with the aim to make significant progress, and if possible conclude the Agreement, by the first quarter of 2026, subject to their respective domestic processes.
The Participants intend for the negotiations of the Agreement to focus on the following key areas:
Investment, Commercial Considerations, and Opportunities
Switzerland and Liechtenstein support the increase of foreign direct investment by Swiss and Liechtenstein enterprises into the United States.
Switzerland intends to encourage and facilitate at least $200 billion of investment into the United States, across all 50 states, over the next five years, to create manufacturing and research and development jobs. Liechtenstein intends to encourage and facilitate at least $300 million of investment into the
United States and increase by 50 percent over the next five years the number of jobs created by its private sector in the United States. Switzerland and Liechtenstein intend to encourage and facilitate one third of these investments by the end of 2026. The United States intends to determine, in its application of reciprocal tariffs, if Switzerland and Liechtenstein have taken appropriate steps to encourage and facilitate these investments and associated job creation. If needed, the Participants intend to jointly discuss the steps taken to encourage and facilitate such investment and job creation and determine additional measures for investment promotion and facilitation.
The Participants intend to encourage their enterprises to promote and develop training and apprenticeship programs, including Registered Apprenticeship programs, for U.S. workers in key high-growth sectors in the United States, taking into account their current and future investments.
The Participants intend to cooperate on this issue.
Switzerland and Liechtenstein intend to work together with the United States on addressing potential distortions of bilateral trade and investment arising from industrial subsidies or actions of state-owned enterprises.
The Participants intend to create the best possible environment to encourage and facilitate cross-border investments and job creation.
2. Tariffs
Recognizing the Treaty of 29 March 1923 between Switzerland and Liechtenstein on Accession of the Principality of Liechtenstein to the Swiss Customs Area, the United States intends to apply the same tariff treatment to both Switzerland and Liechtenstein.
Switzerland and Liechtenstein intend to improve market access for U.S. goods, through the application of zero duties on all U.S. industrial goods, U.S. seafood, and certain U.S. agricultural goods, and through the application of tariff rate quotas for a number of other U.S. agricultural goods.
The United States intends to apply the higher of either the U.S. most-favored-nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of Switzerland and Liechtenstein and to apply only the U.S. MFN tariff rate on certain products listed in the “Potential Tariff Adjustments for Aligned Partners” Annex to Executive Order 14346 (Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements).
The United States intends to promptly ensure that the MFN tariff and the tariff imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232) do not exceed 15 percent for originating pharmaceutical goods and semiconductors of Switzerland and Liechtenstein subject to Section 232 tariffs. The United States intends to positively consider the effect of the Agreement on national security, including when taking action under Section 232.
The Participants intend for the benefits of the Agreement to accrue predominantly to the Participants. If the Participants determine that the benefits are not accruing predominantly to the Participants, the Participants may modify the Agreement with rules of origin necessary to achieve that objective.
The Participants intend to cooperate, where relevant, on matters relating to transshipment and circumvention practices, in accordance with their respective domestic laws and regulations.
3. Non-Tariff Barriers and Related Matters
The United States and Switzerland each intend to accord to conformity assessment bodies located in the territory of the other treatment no less favorable than they accord to conformity assessment bodies located in their own respective territories. Treatment under this paragraph includes procedures, criteria, fees, and other conditions relating to accrediting, approving, licensing, or otherwise recognizing conformity assessment bodies.
The Participants intend to apply the World Trade Organization (WTO) Decision of the Technical Barriers to Trade Committee on Principles for the Development of International Standards, Guides and Recommendations (2000) to determine relevant international standards within the meaning of Articles 2 and 5 and Annex 3 of the WTO Agreement on Technical Barriers to Trade, and intend to negotiate provisions clarifying this understanding.
With respect to automobiles, Switzerland intends to work with the United States to facilitate the recognition of Federal Motor Vehicle Safety Standards.
The Participants intend to advance cooperation in mutually agreed strategic sectors, including medical devices. Switzerland intends to facilitate the acceptance of medical devices cleared or approved by the U.S. Food and Drug Administration.
The United States acknowledges the efforts made by Switzerland to facilitate trade in beef and beef products. Switzerland intends to work with the United States to address specific measures that restrict market access for U.S. poultry and poultry products, strengthening opportunities for U.S. agricultural exports in Switzerland. The United States and Switzerland intend to cooperate on streamlining sanitary requirements for labelling and certificates, particularly for beef, bison, and dairy products.
The Participants intend to discuss robust commitments related to intellectual property rights protection and enforcement, including transparent and fair treatment of geographical indications.
The Participants intend to continue to provide an open and competitive environment for service suppliers. Accordingly, Switzerland and Liechtenstein intend to consider opportunities to provide service suppliers additional access to their markets.
The Participants intend to increase their cooperation on labor-related trade issues, and work to address forced labor, including forced child labor, and the worst forms of child labor in supply chains. Switzerland and Liechtenstein intend to continue to protect internationally recognized labor rights. Switzerland and Liechtenstein intend to continue to adopt and implement high levels of environmental protections, effectively enforce their respective environmental laws, and work together with the United States on trade-related environmental measures, including those that may affect trade between each of them and the United States.
The Participants intend to negotiate commitments on good regulatory practices to ensure greater transparency, predictability, and participation throughout the regulatory lifecycle.
With a view to achieving greater reciprocal benefits from participation in their procurement markets, the Participants reaffirm their commitments under the WTO plurilateral Agreement on Government Procurement and their other binding international procurement obligations, and intend to clarify that states that are not party to these agreements do not benefit from non-discriminatory treatment in procurement at the central governmental level covered by such agreements, including through further implementation measures in their respective national procurement frameworks, if necessary.
The United States and Switzerland intend to foster the use of technology solutions that allow for full pre-arrival processing, paperless trade, and digitalized customs procedures.
4. Digital Trade and Technology
Switzerland and Liechtenstein intend to continue to refrain from imposing digital services taxes.
The Participants intend to facilitate trusted cross-border data flows and address data localization requirements, taking into account legitimate public policy objectives.
The Participants intend to explore mechanisms that promote interoperability between their respective privacy frameworks with a view to facilitating secure cross-border transfers of data.
The Participants intend to refrain from imposing customs duties on electronic transmissions and to support the multilateral adoption of a permanent moratorium on customs duties on electronic transmissions at the WTO.
5. Economic Security
The Participants intend to strengthen their cooperation on economic security, including on addressing non-market policies of third countries.
The Participants recognize that the effective enforcement of economic and trade sanctions serves the Participants’ shared interests. The Participants intend to strengthen existing cooperation with regard to U.S. export controls and sanctions.
Switzerland and Liechtenstein intend to cooperate with the United States on matters related to the review of inbound investment, including on the basis of national security.
Switzerland and Liechtenstein intend to work cooperatively with the United States to secure supply chains and improve supply chain resilience in sectors of shared interest.
The Participants intend to coordinate the timing of their respective domestic processes for the entry into force and implementation of the Agreement.
This document does not constitute a legally binding instrument creating or affecting any rights or obligations under international law. {SOURCE}
Posted originally on CTH on November 9, 2025 | Sundance
Treasury Secretary Scott Bessent appears on ABC This Week to combat the narrative engineering of DNC transcriptionist George Stephanopoulos.
Sometimes it’s worth watching Stephanopoulos, Bill Clinton’s former Chief of Staff, because he frames the political position, current and future, for the Democrat party. Video and Transcript Below:
[Transcript] STEPHANOPOULOS: And we’re joined now by the Treasury secretary, Scott Bessent.
Mr. Bessent, thank you for joining us this morning.
We’ve just heard about all these impacts from the shutdown — government shutdown right now. Are we starting to see — see a permanent impact on the economy?
TREASURY SECRETARY SCOTT BESSENT: Sure, George.
And good to be with you.
And we’ve seen an impact on the economy from day one, but it’s getting worse and worse. We had a fantastic economy under President Trump the past two quarters. And now there are estimates that the economy, economic growth for this quarter, could be cut by as much as half if the shutdown continues.
And what your correspondent didn’t talk about there, George, was there’s, of course, the human cost, and we’re going to have the busiest travel day of the year, the day after Thanksgiving. And, you know, Americans should look to five Democratic senators to come across the aisle to open that. But on the other side, there’s also, cargo is being slowed down. So, you know, we could end up with shortages, whether it’s in our supply chains, whether it’s for the holidays.
So, you know, cargo and people are both being slowed down here. And that’s for safety’s sake, George.
STEPHANOPOULOS: The president continues to post about ending the filibuster. Is that — is that the best way to end the shutdown right now? Is that what the administration’s position is?
BESSENT: No, George, the best — the best way to do it — and look, you were involved in a lot of these in the ’90s. And, you know, you basically called the Republicans terrorists and, you know, you said that it is not the responsible party that keeps the government closed.
And so, what we need is five brave, moderate Democratic senators to cross the aisle because right now it is 52 to three, 52 to three, five Democrats can cross the aisle and reopen the government. That’s the best way to do it, George.
STEPHANOPOULOS: I can disagree with you about the history there, but we don’t do history lesson right now.
BESSENT: No, George —
(CROSSTALK)
STEPHANOPOULOS: Let’s talk — let’s talk about — let’s talk about —
BESSENT: No, no, no. George, George, George —
(CROSSTALK)
STEPHANOPOULOS: Let’s talk — sir, let’s talk about what’s happening right now. I asked you a question —
BESSENT: If you want, I’ve got all your quotes here. I got all your quotes here, George.
STEPHANOPOULOS: I am sure — I am — I’m sure you do. But let’s talk about the situation right now —
(CROSSTALK)
BESSENT: And I went back and read your book. So, you got one — one purchase on Amazon this week. And that’s very much what you said.
STEPHANOPOULOS: That’s — it’s a mis — mischaracterization of history. But I do want to talk about right now, is the best way to end the — to end the shutdown right now to end the filibuster?
BESSENT: The best way is for five Democratic senators to come across the aisle. The — what are we on? Vote 13, 14, 15. Mike Johnson got the reopening out of the House very quickly.
And you know what — what’s changed since the spring, George, is — you know, is Chuck Schumer’s poll numbers. He had a clean continuing resolution in the spring.
And why are Democrats doing this now, George? Again, you’ve been involved with this. The — you know, explain what’s changed.
You know, Senator Chris Murphy gave the game away this week when he said, “Well, you know, now it’s to our advantage to keep the government closed.” They have turned the American people into pawns.
STEPHANOPOULOS: The president has also come forward with a new proposal overnight saying it’s time instead to do away with Obamacare, instead to have the money go directly to the people.
Do you have a formal proposal to do that?
BESSENT: We don’t have a formal proposal, but you know, what I have noticed over time is that the Democrats give all these bills the Orwellian names, the Affordable Care Act, the Inflation Reduction Act, and we end up with just the opposite. You know, the Affordable Care Act has become unaffordable, and the Inflation Reduction Act set off the greatest inflation in 50 years.
STEPHANOPOULOS: Well, I’m a little confused because the president been posting about that overnight and into this morning, but you’re not proposing that to the Senate right now?
BESSENT: We’re not proposing it to the Senate right now. No.
STEPHANOPOULOS: Then why is the president posting about it?
BESSENT: George, you know, the president’s posting about it, but again, we have got to get the government reopen before, you know, we do this. We are not going to negotiate with the Democrats until they reopen the government.
It’s very simple. Reopen the government, then we can have a discussion.
STEPHANOPOULOS: Let’s talk about affordability and inflation. That was one of the key concerns that voters said was on their minds as they were voting this Tuesday. It appeared to be the driving force in the elections. But President Trump is still insisting that prices are way down even though last month’s report showed inflation stuck at about 3 percent.
Are Americans worried about inflation just wrong?
BESSENT: Well, George, I can tell you, the — what we’re not going to do is what happened the — under the Biden administration where, you know, the administration and the media gaslit everyone and said, “Oh, you know, there’s a vibe session. You don’t understand how good you had — had it.”
And what happened then was we had the worst inflation, 40 or 50 years — you know, 22, 23 percent, but the basket of goods and services for working Americans was up more than 30 percent.
And what we’re seeing is we had to stop the increase first. Now we are starting to see prices level off, come down. You know, gasoline is down, interest rates are down, so mortgages are down. And I think we are making substantial progress on that.
And I think over the coming months and the next year, prices are going to come down.
STEPHANOPOULOS: The president says though, he just had posted this morning that there’s almost no inflation. The consumer price index is higher than it was in the beginning of the year. Electricity rates are rising, so are prices for coffee, beef, vegetables, televisions.
And it’s not just me. It’s not just economists are saying that. Your own Republican members of Congress are saying that, including Marjorie Taylor Greene. Let’s look.
(BEGIN VIDEO CLIP)
REP. MARJORIE TAYLOR GREENE (R-GA): I go to the grocery store myself. Grocery prices remain high. Energy prices are high. My electricity bills are higher here in Washington, D.C., at my apartment, and they’re also higher at my house in Rome, Georgia. Higher than they were a year ago. So — so, affordability is a problem.
(END VIDEO CLIP)
STEPHANOPOULOS: How do you respond to Congresswoman Greene?
BESSENT: Well, George, what I — what I would respond to is electricity prices are a state problem. And you know, I was very interested to see in the earlier clip where the governor — the governor-elect of New Jersey said, “Well, I’m going to bring down energy prices.” Well, it was her predecessor, Phil Murphy, who took them up.
So, you know, look, there are things that the federal government can control. Local electricity prices are not one of them. But, you know, energy prices, gasoline prices, are way down. And, you know, we — we are doing what we can every day. I think we’re on a very good path to bringing prices down.
STEPHANOPOULOS: Let’s talk about tariffs and the Supreme Court. The president is also posting about tariffs this morning. He’s saying, “people that are against tariffs are fools. We’re taking in trillions of dollars.” Is that true?
BESSENT: We have taken — over the course of the next few years, we could take in trillions of dollars, George. But the real — the real goal of the tariffs is to re-balance trade and make it more fair.
You know, over time, the president’s goal is to bring back manufacturing to the U.S. You know, for the past two, three, four decades we have seen our manufacturing sector gutted. So, what would happen over time is we would take insubstantial money, as factories come back to the U.S., as we’re seeing now. I was just down in South Carolina at a rare earth magnet plant and a Boeing plant on Friday. And, you know, that’s the, I believe, 1,500 total new jobs. Tariff income will be substantial, but then that will rebalance.
The goal here, George, is to re-balance trade. So, tariff income will be substantial at the beginning. It will come down. And then domestic tax revenues will climb as corporate taxes go up and all of these high-paying jobs are created.
STEPHANOPOULOS: The president’s main argument, though, seems to be that we’re — it’s about taking in the revenue. And he also promised this morning a dividend —
BESSENT: No, no, no, George. Stop right — no.
STEPHANOPOULOS: A dividend of at least $2,000 a person, not including high-income people. How is he going to pay that dividend of $2,000 a person?
BESSENT: Yes, George, it’s not about taking in the revenue, it’s about re-balancing. And the revenue occurs early on. And then as we rebalance and the jobs come home, then it becomes domestic tax revenue.
STEPHANOPOULOS: Are you worried that the president’s focus on revenue, though, which is what he’s been focusing on in his public statements, is going to hurt your argument in the Supreme Court?
BESSENT: Not at all. It’s completely consistent that the revenues come in at the beginning, then, as we rebalance, which is the goal of this, bring back high-paid manufacturing jobs to the U.S., then it will then morph into domestic tax revenues.
You know, President Trump has consistently fought for the American worker, and we are seeing trillions of investments in the U.S. that would not have occurred without the tariffs.
The other thing, too, is, you know, the authority that he uses is called IEEPA. It is an emergency authority. And he used that emergency authority. He got the Chinese to the table to negotiate on stopping the precursors for fentanyl drugs. You know, fentanyl, hundreds of thousands of Americans dying every year is not an emergency, what is? On October 8th, Chinese threatened to put export controls on rare earth materials. He was able to threaten 100 percent tariffs, and we were able to negotiate that away.
And then, finally, in terms of the general tariffs, we are doing these trial deals that would not be possible. We were at a tipping point in terms of the economy, in terms of our trade balance, and we are re-balancing successfully.
STEPHANOPOULOS: Do you have a proposal, a formal proposal, to give a $2,000 dividend to every American?
BESSENT: I haven’t spoken to the president about this yet, but, you know, it could — the $2,000 dividend could come in lots of forms, in lots of ways, George. You know, it could be just the tax decreases that we are seeing on the president’s agenda. You know, no tax on tips, no tax on overtime, no tax on Social Security. Deductibility of auto loans. So, you know, those are substantial deductions that, you know, are being financed in the tax bill.
STEPHANOPOULOS: Secretary, thanks for your time this morning.
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