May 8, 2025 • 9 mins
US Commerce Secretary Howard Lutnick discusses the latest trade deal with the UK and updates for ongoing negotiations with other countries. He spoke to Bloomberg's Kailey Leinz and Saleha Mohsin.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Commerce Secretary Howard Lutnik, Mister secretary, we appreciate your time
as we consider the deals that have yet to be
made with other trading partners. Is the message this one
sends to them that sectoral tariffs are up for negotiation,
but that ten percent base rate is not right.
Speaker 1 (00:24):
So reciprocal tariffs, if you think about it, is how
open is your economy to our exports, how fair is
it to our exports? What kind of trade deficit you do?
And that sets that line. So ten percent is the
bottom line for that. But as the President said, many
of those will be higher. Of course, you can bring
them down by opening your government, opening your economy to
(00:48):
US exports, and then the sectoral tariffs. That's where you
can be super smart if you're opening your market to us,
and that's what the UK did.
Speaker 3 (00:57):
The UK said I'm going.
Speaker 1 (00:59):
To let you export into the UK five billion dollars
more of services. That's great for American exports. We'll pay
you six billion dollars in tariffs, but help us out
on cars and steal in aluminum.
Speaker 4 (01:12):
They were never our problem.
Speaker 1 (01:13):
They nationalized their steel industry. They don't really have much
of a steel industry. They agreed to come on and
do it with us. So they're going to put the
same kind of tariffs, the same kind of quotas, keep
out the bad guys, and let's build our steel and
aluminum industries inside our walled countries together. And that was
These are sort of the key parts of being super smart,
(01:36):
being super rigorous, and trying to figure out the right
answer how to do trade deals that no one's ever
done before.
Speaker 5 (01:44):
We're talking about the rigor here, But Secretary Lutnik tell
us a little bit about what the China angle is
with the US UK agreement. We've heard that China should
be pressured by some of these countries that the US
strikes up agreements with.
Speaker 1 (01:56):
Yeah, that's not our strategy at all. I want to
be clear, that is not our strategy. Our strategy is
to do fair and reciprocal trade, to open these markets
to trade, and that's what we're going to do now.
There are some countries that have huge trade deficits with
China and huge trade surpluses with US, like take Vietnam, right,
(02:18):
they buy eighty five billion dollars worth of goods on
a trade deficit with China, and then they run one
hundred and ten or one hundred and five one hundred
and ten billion dollar trade surplus with US as they
assemble those things and ship it to US. So Vietnam's
got issues, to Thailand's got issues. All those countries that
are really China's proxies to US are going to have
(02:40):
issues because our view is going to be whatever the
tariff results on China should be their tariff on their
business with them. Now, probably the most interesting country I
can tell you that has a huge trade deficit with
China and a huge trade surplus with US is the
European Union.
Speaker 3 (02:59):
And no one thinks.
Speaker 1 (03:00):
About that, but a huge amount of the European Union
is really a tariff arbitrage from China through the European
Union into the American economy. And that is one of
those sort of really really interesting sticking points when we
sit down and we talk to the European Union.
Speaker 5 (03:20):
And what's the goal with the UK when it comes
to China. Is there an expectation that then the UK
should actually also be pressing China.
Speaker 3 (03:28):
No, not so much.
Speaker 4 (03:28):
We're not with the UK again. We had a balanced
budget was really about our exports.
Speaker 1 (03:33):
We are not focused in sort of this, you know,
singling out China, you know, any of that stuff.
Speaker 3 (03:40):
That's just not the president's goal.
Speaker 1 (03:42):
The president's goal is to drive the American economy. Hopefully
the meetings this weekend will de escalate things and put
things back on the right track with China and the
US on trade. But our objective with all these countries
is whatever rate we set for China should be for
the countries that trade with China and send it into US, that.
Speaker 4 (04:03):
Should be about the same for those two. That makes
some sense.
Speaker 1 (04:06):
And otherwise, let's grow our exports, and let's grow our
tariff revenues. Let's grow our exports, and let's take this
trade deficit down. Remember, if you have a one point
two trillion dollar trade deficit and you cut it to
nine hundred billion, you only cut of twenty five percent.
Speaker 4 (04:21):
You grow our GDP one percent.
Speaker 1 (04:24):
Imagine the guy sitting in the building behind me grows
our economy one percent. And then you bring in all
these building, right, the trillions and trillions of investment, that's
probably gonna bring.
Speaker 4 (04:34):
Two points of GDP.
Speaker 1 (04:36):
No one ever thinks about the fact that the US doesn't.
Our economy grows similar to everybody else. And you know why,
because we export four points a year of GDP growth
to the rest of the world. When Donald Trump brings
that home, you're going to see our economy grow like fire.
And that's what he's talking about, and that's what he
(04:57):
talked about today, Secretary.
Speaker 2 (05:00):
And your last answer, you referred to a few other
trading partners, the European Union, Vietnam you also called out.
Is that where we should look to see the next
deal a merger We likely to see other partners like
Japan and India.
Speaker 1 (05:11):
First, Well, I think we would like to do one
in Asia so we can show that kind of arrangement.
We want to do one in Latin America. We're trying
to show people a framework of how to do business
so that we can roll much more quickly. Right, So,
once you do one trade in Latin America, you do
one in the Caribbean, you can then say, look, here's
(05:32):
a template. Why don't you all think about it and
see does that work for you? And if you want
to modify and modify it. But then what will happen
is we'll do one, and then we'll do ten, and
then we'll do one and then we'll do fifteen, right,
and we want to do big But obviously, when you
talk about Japan, I mean, come on, you've got to
spend an enormous amount of time with Japan Korea.
Speaker 3 (05:48):
These are not going to be fast deals. Now.
Speaker 1 (05:50):
India has been leaning in really hard, right, you know,
I love doing a deal with India.
Speaker 4 (05:55):
That's certainly a possibility. But this is a lot of work.
Speaker 1 (05:58):
These are a lot of lines where remember this was
not sort of a just a gloss over handshake trade deal.
This was two thousand, six hundred lines of tariffs changing,
modifying and coming down.
Speaker 4 (06:11):
And you know when you talk about India, it's probably
seven thousand lines. It just takes time and it just
takes work.
Speaker 3 (06:17):
So give us a chance.
Speaker 1 (06:18):
Don't be pushing rushing, But let me tell you, each
one of these trade deals is going to feel the same.
Speaker 3 (06:23):
You're going to feel huge.
Speaker 1 (06:25):
Export opportunity coming from America, huge tariff revenue coming in right,
and a dramatic improvement of the United States economy as
we reshore the industrial base of America.
Speaker 5 (06:38):
Mister Secretary, should we see the deal between the US
and UK as basically a roadmap or a blueprint of
how future trade deals in the next two months will
look exactly right.
Speaker 1 (06:48):
So people understand, Okay, there's the baseline.
Speaker 3 (06:51):
If you want your tarer or your.
Speaker 4 (06:52):
Reciprocal tariff rate low, you've got to attack.
Speaker 3 (06:55):
The trade deficit.
Speaker 1 (06:56):
You've got to open your market, you've got to let
us export, you gotta have those things be together. And
then if you want to talk and really be smart
and really be thoughtful, then let's talk sectoral tariff. So
open your market big, and then if you want to
talk to us, we'll try to come up with the
smartest answer like we did with the UK. Right, they
(07:17):
want to sell Rolls Royce engines to Boeing. Right, so
we made a deal and said, you know what, you
can sell your parts to Boeing. Tarafree Airbus makes planes
in America. Can sell those parts to Tarafree. And then
what happens with it. They buy ten billion dollars with
the Boeing planes today as part of the deal. So
this is the kind when you have the right partner,
(07:37):
you can come up with really really smart, thoughtful and
rigorous trade deal like we've.
Speaker 3 (07:42):
Done with the UK.
Speaker 2 (07:44):
Well, and as you've alluded to, mister Secretary, you believe
this will result in higher revenue for the United States.
If we're going to get all this revenue from tariffs,
why would the president be pushing for higher taxes on anybody?
Because our understanding is for the wealthy. He's looking at
a new rate of thirty nine six percent, and I
thought the Republican Party didn't stand for that kind of thing.
Speaker 1 (08:04):
Well, you realize that the tariff revenues doesn't count toward
the reconciliation numbers.
Speaker 3 (08:11):
Don't ask why.
Speaker 1 (08:13):
I can't understand why we're running it like twenty twenty
five billion a month and they're not counting it. But
we'll leave that aside for another day. This is this
is Washington. They have their own accounting practices. So the
president's trying to make sure he gets no tax on tips,
no tax on overtime overtime, and no tax on Social Security.
And if he says, look the richest Americans, remember he
(08:34):
cut it from thirty nine point six to thirty seven.
So if he just goes back to what he did
last time, you know, I'm in favor of that. I
think it's smart as long as it's a redistribution to
his priorities of no tax on tips, no tax on
overtime and no tax on Social Security.
Speaker 3 (08:50):
I think it's smart.
Speaker 1 (08:50):
But what you'll see next year is you'll see the
revenues from tariffs are so great and our deficit is lower.
Speaker 3 (08:57):
Then you've got the gold you know.
Speaker 1 (08:59):
The Trump Card coming out, and that's going to raise
you know, raise revenues and drive that lower, and you're
going to see interest rates lower. You're going to see
the deficit lower, and next year is going to be
one happy year.
Speaker 5 (09:11):
Commerce Secretary Howard Lutnick, thank you so much for joining
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Commerce Secretary Howard Lutnik, Mister secretary, we appreciate your time
as we consider the deals that have yet to be
made with other trading partners. Is the message this one
sends to them that sectoral tariffs are up for negotiation,
but that ten percent base rate is not right.
Speaker 1 (00:24):
So reciprocal tariffs, if you think about it, is how
open is your economy to our exports, how fair is
it to our exports? What kind of trade deficit you do?
And that sets that line. So ten percent is the
bottom line for that. But as the President said, many
of those will be higher. Of course, you can bring
them down by opening your government, opening your economy to
(00:48):
US exports, and then the sectoral tariffs. That's where you
can be super smart if you're opening your market to us,
and that's what the UK did.
Speaker 3 (00:57):
The UK said I'm going.
Speaker 1 (00:59):
To let you export into the UK five billion dollars
more of services. That's great for American exports. We'll pay
you six billion dollars in tariffs, but help us out
on cars and steal in aluminum.
Speaker 4 (01:12):
They were never our problem.
Speaker 1 (01:13):
They nationalized their steel industry. They don't really have much
of a steel industry. They agreed to come on and
do it with us. So they're going to put the
same kind of tariffs, the same kind of quotas, keep
out the bad guys, and let's build our steel and
aluminum industries inside our walled countries together. And that was
These are sort of the key parts of being super smart,
(01:36):
being super rigorous, and trying to figure out the right
answer how to do trade deals that no one's ever
done before.
Speaker 5 (01:44):
We're talking about the rigor here, But Secretary Lutnik tell
us a little bit about what the China angle is
with the US UK agreement. We've heard that China should
be pressured by some of these countries that the US
strikes up agreements with.
Speaker 1 (01:56):
Yeah, that's not our strategy at all. I want to
be clear, that is not our strategy. Our strategy is
to do fair and reciprocal trade, to open these markets
to trade, and that's what we're going to do now.
There are some countries that have huge trade deficits with
China and huge trade surpluses with US, like take Vietnam, right,
(02:18):
they buy eighty five billion dollars worth of goods on
a trade deficit with China, and then they run one
hundred and ten or one hundred and five one hundred
and ten billion dollar trade surplus with US as they
assemble those things and ship it to US. So Vietnam's
got issues, to Thailand's got issues. All those countries that
are really China's proxies to US are going to have
(02:40):
issues because our view is going to be whatever the
tariff results on China should be their tariff on their
business with them. Now, probably the most interesting country I
can tell you that has a huge trade deficit with
China and a huge trade surplus with US is the
European Union.
Speaker 3 (02:59):
And no one thinks.
Speaker 1 (03:00):
About that, but a huge amount of the European Union
is really a tariff arbitrage from China through the European
Union into the American economy. And that is one of
those sort of really really interesting sticking points when we
sit down and we talk to the European Union.
Speaker 5 (03:20):
And what's the goal with the UK when it comes
to China. Is there an expectation that then the UK
should actually also be pressing China.
Speaker 3 (03:28):
No, not so much.
Speaker 4 (03:28):
We're not with the UK again. We had a balanced
budget was really about our exports.
Speaker 1 (03:33):
We are not focused in sort of this, you know,
singling out China, you know, any of that stuff.
Speaker 3 (03:40):
That's just not the president's goal.
Speaker 1 (03:42):
The president's goal is to drive the American economy. Hopefully
the meetings this weekend will de escalate things and put
things back on the right track with China and the
US on trade. But our objective with all these countries
is whatever rate we set for China should be for
the countries that trade with China and send it into US, that.
Speaker 4 (04:03):
Should be about the same for those two. That makes
some sense.
Speaker 1 (04:06):
And otherwise, let's grow our exports, and let's grow our
tariff revenues. Let's grow our exports, and let's take this
trade deficit down. Remember, if you have a one point
two trillion dollar trade deficit and you cut it to
nine hundred billion, you only cut of twenty five percent.
Speaker 4 (04:21):
You grow our GDP one percent.
Speaker 1 (04:24):
Imagine the guy sitting in the building behind me grows
our economy one percent. And then you bring in all
these building, right, the trillions and trillions of investment, that's
probably gonna bring.
Speaker 4 (04:34):
Two points of GDP.
Speaker 1 (04:36):
No one ever thinks about the fact that the US doesn't.
Our economy grows similar to everybody else. And you know why,
because we export four points a year of GDP growth
to the rest of the world. When Donald Trump brings
that home, you're going to see our economy grow like fire.
And that's what he's talking about, and that's what he
(04:57):
talked about today, Secretary.
Speaker 2 (05:00):
And your last answer, you referred to a few other
trading partners, the European Union, Vietnam you also called out.
Is that where we should look to see the next
deal a merger We likely to see other partners like
Japan and India.
Speaker 1 (05:11):
First, Well, I think we would like to do one
in Asia so we can show that kind of arrangement.
We want to do one in Latin America. We're trying
to show people a framework of how to do business
so that we can roll much more quickly. Right, So,
once you do one trade in Latin America, you do
one in the Caribbean, you can then say, look, here's
(05:32):
a template. Why don't you all think about it and
see does that work for you? And if you want
to modify and modify it. But then what will happen
is we'll do one, and then we'll do ten, and
then we'll do one and then we'll do fifteen, right,
and we want to do big But obviously, when you
talk about Japan, I mean, come on, you've got to
spend an enormous amount of time with Japan Korea.
Speaker 3 (05:48):
These are not going to be fast deals. Now.
Speaker 1 (05:50):
India has been leaning in really hard, right, you know,
I love doing a deal with India.
Speaker 4 (05:55):
That's certainly a possibility. But this is a lot of work.
Speaker 1 (05:58):
These are a lot of lines where remember this was
not sort of a just a gloss over handshake trade deal.
This was two thousand, six hundred lines of tariffs changing,
modifying and coming down.
Speaker 4 (06:11):
And you know when you talk about India, it's probably
seven thousand lines. It just takes time and it just
takes work.
Speaker 3 (06:17):
So give us a chance.
Speaker 1 (06:18):
Don't be pushing rushing, But let me tell you, each
one of these trade deals is going to feel the same.
Speaker 3 (06:23):
You're going to feel huge.
Speaker 1 (06:25):
Export opportunity coming from America, huge tariff revenue coming in right,
and a dramatic improvement of the United States economy as
we reshore the industrial base of America.
Speaker 5 (06:38):
Mister Secretary, should we see the deal between the US
and UK as basically a roadmap or a blueprint of
how future trade deals in the next two months will
look exactly right.
Speaker 1 (06:48):
So people understand, Okay, there's the baseline.
Speaker 3 (06:51):
If you want your tarer or your.
Speaker 4 (06:52):
Reciprocal tariff rate low, you've got to attack.
Speaker 3 (06:55):
The trade deficit.
Speaker 1 (06:56):
You've got to open your market, you've got to let
us export, you gotta have those things be together. And
then if you want to talk and really be smart
and really be thoughtful, then let's talk sectoral tariff. So
open your market big, and then if you want to
talk to us, we'll try to come up with the
smartest answer like we did with the UK. Right, they
(07:17):
want to sell Rolls Royce engines to Boeing. Right, so
we made a deal and said, you know what, you
can sell your parts to Boeing. Tarafree Airbus makes planes
in America. Can sell those parts to Tarafree. And then
what happens with it. They buy ten billion dollars with
the Boeing planes today as part of the deal. So
this is the kind when you have the right partner,
(07:37):
you can come up with really really smart, thoughtful and
rigorous trade deal like we've.
Speaker 3 (07:42):
Done with the UK.
Speaker 2 (07:44):
Well, and as you've alluded to, mister Secretary, you believe
this will result in higher revenue for the United States.
If we're going to get all this revenue from tariffs,
why would the president be pushing for higher taxes on anybody?
Because our understanding is for the wealthy. He's looking at
a new rate of thirty nine six percent, and I
thought the Republican Party didn't stand for that kind of thing.
Speaker 1 (08:04):
Well, you realize that the tariff revenues doesn't count toward
the reconciliation numbers.
Speaker 3 (08:11):
Don't ask why.
Speaker 1 (08:13):
I can't understand why we're running it like twenty twenty
five billion a month and they're not counting it. But
we'll leave that aside for another day. This is this
is Washington. They have their own accounting practices. So the
president's trying to make sure he gets no tax on tips,
no tax on overtime overtime, and no tax on Social Security.
And if he says, look the richest Americans, remember he
(08:34):
cut it from thirty nine point six to thirty seven.
So if he just goes back to what he did
last time, you know, I'm in favor of that. I
think it's smart as long as it's a redistribution to
his priorities of no tax on tips, no tax on
overtime and no tax on Social Security.
Speaker 3 (08:50):
I think it's smart.
Speaker 1 (08:50):
But what you'll see next year is you'll see the
revenues from tariffs are so great and our deficit is lower.
Speaker 3 (08:57):
Then you've got the gold you know.
Speaker 1 (08:59):
The Trump Card coming out, and that's going to raise
you know, raise revenues and drive that lower, and you're
going to see interest rates lower. You're going to see
the deficit lower, and next year is going to be
one happy year.
Speaker 5 (09:11):
Commerce Secretary Howard Lutnick, thank you so much for joining
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