Kudlow praises Trump trade, says impeachment is ‘doomed to failure’


DAN HENNINGER, THANK YOU VERY MUCH.>>>OUR NEXT GUEST NEEDS NO INTRODUCTION WHATSOEVER. HE IS LARRY KUDLOW, NATIONAL ECONOMIC COUNCIL DIRECTOR. LARRY, I KNOW YOU’RE THERE. THANKS FOR JOINING US AGAIN. I’VE GOT TO START WITH USMCA, THE NEW NAFTA. IT REALLY DOESN’T LOOK LIKE IT’S GOING TO GET PASSED ANY TIME SOON IN OUR CONGRESS. I THINK THAT’S A BIG PROBLEM FOR THE ADMINISTRATION. IT’S A BIG PROBLEM FOR AMERICA. WHAT CAN YOU DO ABOUT IT?>>WELL, LOOK, I’M NOT SO PESSIMISTIC. YOU ARE VERY BEARISH THIS MORNING, STUART. STUART: EVERY REASON, LARRY. EVERY REASON. A CONGRESS THAT IS CONSUMED WITH IMPEACHMENT AND IT IS CONSUMED WITH IMPEACHMENT. I DON’T THINK YOU CAN CREATE A SPECIAL LANE TO GET USMCA THROUGH AND IGNORE ALL THE REST.>>WELL, LET’S HOLD BACK FOR A MINUTE ON THE FORECAST. I HAVE TALKED TO BOB LIGHTHIZER, AMBASSADOR LIGHTHIZER, ABOUT THIS YESTERDAY UP IN NEW YORK AT THE U.N. MEETINGS, AND HE’S HOLDING OUT FOR SOME OPTIMISM. LOOK, I UNDERSTAND THE IMPEACHMENT THING IS GOING TO BE A BIG THING. I GUESS, I’M NOT REALLY SURE, THEY ARE MAKING INQUIRIES, THEY HAVEN’T VOTED YET. WE’LL SEE HOW THAT PLAYS OUT, OKAY? WE’LL SEE HOW THAT PLAYS OUT. FRANKLY, JUDGING FROM THE RELEASE OF THE LETTER WHICH EXPLAINS A LOT OF GOOD THINGS AND ALL THE SECOND, THIRD AND FOURTH-HAND STUFF FROM THIS ALLEGED WHISTLEBLOWER, I DON’T KNOW, OKAY. I’M GOING TO LEAVE THAT ASIDE. WHAT I WILL SAY, THOUGH, IS YOU’VE STILL GOT, WHAT, 50, 60 HOUSE DEMOCRATIC MEMBERS WHO CAME FROM REPUBLICAN AND TRUMP DISTRICTS WHO UNDERSTAND THE POWER OF USMCA AND TO SOME EXTENT, IF THEY’RE GOING TO GO OFF THE LEDGE ON SOME CRAZY IDEA OF IMPEACHMENT WHICH IS DOOMED TO FAILURE, THEY MIGHT EVEN BE MORE INCLINED TO DO SOMETHING CONSTRUCTIVE ON THE U.S. CANADA MEXICO TRADE DEAL AND IT IS A GREAT DEAL AND AS YOU AND I HAVE SPOKEN, FOR ECONOMIC GROWTH IN THIS COUNTRY, IT WILL ADD HALF A PERCENTAGE POINT OF GDP, MAYBE A COUPLE HUNDRED THOUSAND JOBS PER YEAR, DOMESTIC CONTENT PROTECTION, WAGE PROTECTION, I.P. THEFT PROTECTION, CURRENCY STABILITY, ALL KINDS OF THINGS, DAIRY FARMERS. IT’S A TERRIFIC DEAL. SO I WOULDN’T BE SO FAST TO PREDICT THAT. WE ARE STILL THINKING SOMETIME THIS AUTUMN, SPEAKER PELOSI WILL GIVE US A VOTE AND WE HAVE A VERY GOOD CHANCE OF GETTING THERE. SO I’M NOT GOING TO WRITE THAT OFF. STUART: UPDATE US, PLEASE, ON CHINA TRADE. I BELIEVE YESTERDAY, THE PRESIDENT SAYS WE ARE GETTING A DEAL SOONER THAN WE THINK. OUR OWN KRISTINA PARTSINEVELOS PUSHED BACK ON THAT. I WANT TO ROLL THAT TAPE JUST FOR A MOMENT. ROLL THE TAPE, PLEASE.>>MARKETS REACTED POSITIVELY AFTER YOU SPOKE ABOUT CHINA AND THAT IT WOULD HAPPEN SOONER RATHER THAN UNEXPECTEDLY, YET YOU HAVE THE FOREIGN MINISTER OF CHINA SAYING THAT THEY HAVE NO INTENTION OF, YOU KNOW, UNSEATING THE UNITED STATES. THEY ARE INVESTING HEAVILY IN INFRASTRUCTURE –>>NOT ANYMORE. MAYBE THEY JUST SAY THAT.>>WHAT IS DIFFERENT THIS TIME, THOUGH? THE FACT YOU’RE SAYING IT’S PROGRESSING?>>OH, I JUST THINK IT’S PROGRESSING. I THINK THEY WANT THE MAKE A DEAL. THEY’RE LOSING THEIR SUPPLY CHAIN. STUART: WELL, HE JUST THINKS IT’S PROGRESSING. CAN HE GIVE US AN UPDATE ON THIS?>>YOU KNOW, I WAS JUST SITTING A FEW SEATS AWAY WHEN ALL THAT TRANSPIRED. LOOK, LET ME ADD THIS POINT. AS YOU MAY KNOW, IN RECENT DAYS, JUST RECENT DAYS, CHINA IS IN THE COMMODITY MARKETS BUYING A HUGE VOLUME OF SOYBEANS. I THINK THEIR SOYBEAN IMPORTS IN THE UNITED STATES HAVE NOW INCREASED BY OVER 80% AGAINST LAST YEAR, AND FURTHERMORE, THEY ARE LOOKING TO BUY LARGE AMOUNTS OF PORK TO COVER THEIR DOMESTIC PROBLEMS THERE. SO I WOULD SAY THAT MOOD MUSIC, IF YOU WILL, IS VERY POSITIVE GOING INTO THE NEGOTIATIONS. NOW, THE PRINCIPALS, SECRETARY MNUCHIN, AMBASSADOR LIGHTHIZER, WILL MEET THE WEEK AFTER NEXT WITH THE CHINA TEAM, LIU HE, VICE PREMIER LIU HE. THE DEPUTIES MEETING WAS FINE, IT WAS CONSTRUCTIVE, IT SET OUT AN AGENDA. IF ANYTHING, I WOULD SAY THE MOOD MUSIC ON CHINA, ESPECIALLY NOW THAT CHINA IS COMING INTO THE COMMODITY MARKET, I’M TOLD SOYBEAN PRICES HAVE BEEN UP A BIT, THIS IS A VERY, VERY GOOD BEGINNING. WE HAVEN’T SEEN THIS KIND OF THING. SO AGAIN, LET’S NOT PROJECT, WHAT PRESIDENT TRUMP WAS TRYING TO SAY IS I THINK HE SAYS THIS CONSISTENTLY, IF IT IS A GOOD DEAL FOR THE UNITED STATES AFTER ALL THE PRESIDENT IS PROTECTING AND DEFENDING OUR ECONOMY AGAINST A NUMBER OF UNFAIR TRADING PRACTICES THAT WE CAN DISCUSS, IF IT’S A GOOD DEAL, HE WOULD MAKE A GOOD DEAL AND HIS OWN HUNCH, HIS OWN HUNCHES, BECAUSE OF THE DETERIORATION IN CHINA’S ECONOMY, THEY MAY BE MUCH MORE WILLING NOW TO COME TO THE NEGOTIATING TABLE AND DEAL WITH I.P. THEFT AND TARIFF BARRIERS AND FORCED TRANSFERS OF TECHNOLOGY AND ALL THE REST. HAVING SAID THAT, STUART, I KNOW YOU’RE DYING TO ASK ME ABOUT THE JAPANESE TRADE DEAL WHICH IS SO VERY IMPORTANT. STUART: YOU TELLING ME WHICH QUESTION TO ASK?>>I WOULD NEVER DO THAT. I WOULD NEVER DO THAT. NEVER. STUART: HERE’S THE QUESTION. YOU’VE GOT A TRADE DEAL WITH JAPAN. DOES IT HAVE TO BE RATIFIED BY CONGRESS?>>IT DOES NOT, ACTUALLY. UNDER TRADE PROMOTION AUTHORITY, IT DOES NOT REQUIRE RATIFICATION. WE DO, THE EXECUTIVE BRANCH HAS THE AUTHORITY TO CHANGE TARIFFS. STUART: WHAT ABOUT WITH CHINA?>>SAME WOULD APPLY TO THE CHINESE DEAL. THE CHINESE DEAL IS A SO-CALLED 301 ACTION. THAT WOULD NOT REQUIRE CONGRESSIONAL APPROVAL. STUART: WHAT ABOUT THE BRITS? SORRY TO KEEP INTERRUPTING YOU. THE BRITS.>>I LOVE THE BRITS. BEFORE I GET TO MY LOVE FOR THE BRITS, I JUST HAVE TO SAY TO YOU ON THIS JAPANESE DEAL, IF WE CAN JUST PAUSE FOR A MINUTE, THESE NEGOTIATIONS STARTED A YEAR AGO. I WAS IN THE ROOM WITH PRIME MINISTER ABE AND PRESIDENT TRUMP A YEAR AGO IN 2018 AT THE U.N. I WAS IN THE ROOM YESTERDAY WHEN THE DEAL WAS FINALIZED. IT’S A FIRST AGREEMENT. IT COVERS A LOT OF IMPORTANT STUFF. OVER 90% OF JAPANESE MARKETS FOR U.S. AGRICULTURE EXPORTS WILL BE OPEN. 90%. WE HAVE NEVER HAD THAT. DOWN THROUGH THE YEARS IT’S ALWAYS BEEN A STICKING POINT. IN RETURN FOR THAT, WE ARE GOING TO OPEN UP A LOT OF OUR INDUSTRIAL COMMODITY MARKETS, EXCLUDING THE AUTO ISSUE, WE ARE GOING TO OPEN IT UP TO JAPAN AND MAYBE MOST IMPORTANTLY, HERE’S A SLEEPER, DIGITAL SERVICES WILL BE OPEN, E-COMMERCE WILL BE OPEN. JAPAN IS OPENING UP THEIR DIGITAL SERVICE MARKET FOR THE FIRST TIME AND THIS, BY THE WAY, GOT TO GIVE LIGHTHIZER A LOT OF CREDIT HERE, THIS IS EXACTLY THE SAME IDEA AS IN USMCA WHERE DIGITAL SERVICES AND I.P. WERE PUT INTO THAT AGREEMENT. SO IT’S BECOME A TEMPLATE. THIS AFRD THIS AFFORDS ENORMOUS OPPORTUNITY FOR U.S. TECH COMPANIES. SO THIS IS A BIG WINNER. I’M SO GRATEFUL YOU ASKED ME ABOUT IT. STUART: YOU KNOW HOW TO DIRECT A TV INTERVIEW SINCE YOU HAVE DONE SO MANY OF THEM. LOOK, I DO WANT TO TALK TO YOU ABOUT THE GROWTH RATE OF OUR ECONOMY THIS YEAR. YOU HAVE BEEN A FREQUENT GUEST ON THE PROGRAM AND A VERY VALUABLE GUEST. YOU HAVE OFTEN SAID, IN FACT YOU SAID IT ALMOST EVERY TIME YOU HAVE BEEN ON THE SHOW THAT YOU’RE LOOKING FOR 3% GROWTH IN THE CALENDAR YEAR 2019. NOW, WE GOT NEWS THIS MORNING THAT SECOND QUARTER, WE ARE ONLY GROWING AT 2%. TO GET TO 3% FOR THE WHOLE YEAR MEANS AN ENORMOUS GROWTH RATE IN THE THIRD AND FOURTH QUARTER, SOMETHING LIKE 4.5%, 5%. WILL YOU NOW ACCEPT THAT WE’RE NOT GOING TO GET TO 3% GROWTH IN 2019?>>WELL, I’M NOT GIVING UP THE FLAG. BY THE WAY, IF YOU MEASURE THESE THINGS FROM YEAR END TO YEAR END, SO-CALLED FOURTH OVER FOURTH, WE MAY STILL BE HANGING IN THERE. LOOK, STU, YOU ARE QUITE RIGHT ABOUT THE FIRST QUARTER WAS, WHAT, 3.0%, SECOND QUARTER 2.0%. THIRD QUARTER’S GOING TO BE BETTER THAN THE SECOND QUARTER WHICH IS SOMETHING WE TALKED ABOUT BEFORE. I THINK THE FOURTH QUARTER SIMILARLY. HERE’S JUST A THOUGHT. THE PRESIDENT DID MENTION THIS AT HIS PRESSER YESTERDAY. WE ARE SEEING A BIG MOVE UP NOW, A BIG REVIVAL OF THE HOUSING SECTOR, OKAY? NEW HOME STARTS, BIG UP NUMBER IN JULY AND ESPECIALLY AUGUST. NEW AND EXISTING HOME SALES, NEW SALES CAME OUT YESTERDAY, BIG MOVE UP IN JULY AND AUGUST. I NOTICED THIS MORNING PENDING HOME SALES, BIG MOVE UP. LOWER INTEREST RATES AND STRONG JOBS AND WAGES ARE HELPING TO BOOST THIS VITAL SECTOR AND WE HAD GOOD NEWS ON THE PMI MANUFACTURING NUMBER. I THINK WE’RE IN A TURNING ZONE UP AND WHATEVER NUMBER YOU GIVE ME IN TERMS OF THE SECOND HALF OF THE YEAR, WITH THE GREATEST RESPECT, LOVE, AFFECTION AND ALL THE REST, I’M TAKING THE OVER. STUART: THAT’S THE MONEY QUOTE. WE WILL USE IT. LARRY KUDLOW, NEXT TIME YOU BETTER INTERVIEW ME. I THINK IT WOULD WORK OUT

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