We were told that "trade wars are good and easy to win." Yet nine months into this trade war with China and many of our close allies, we haven't won, and many Americans are shouldering its costs. Scott Lincicome, international trade attorney and scholar at the Cato Institute, joined Fox News Radio's Guy Benson and Marie Harf to discuss.
Marie Harf: Thank you for joining the show again tonight.
Scott Lincicome: Thanks for having me. Thanks for that endorsement.
Marie Harf: Well it's true I'm not on Twitter myself so in order to see people's Twitter feeds I actually have to search for them proactively alert. And there are about three people I actually look at you. Your feed is one of them because if you want to know anything about trade or economics or just to get a laugh sometimes it's a good one. So people should check it out. So we haven't had you on in a while and present trumps trade wars continue. Now let's start with China because it feels like every few weeks we get reports that there's be more meetings sort of mid-level meetings. Nothing ever seems to change of course get that big news from Apple. A couple weeks ago about you know them coming out and saying they were being hurt in part by the trade war with China. Bring us up to speed on how you're viewing those negotiations and what impact they're having given they haven't made much progress yet.
Scott Lincicome: So we just concluded a pretty high level negotiations in China to the United States and the Chinese government and all reports are pretty optimistic at this point that there will be some sort of deal announced in late February early March which is the deadline for for some sort of deal before President Trump increases tariffs on about 200 billion dollars for the Chinese goods including a lot of stuff that you and I and everybody listening buys at places like Target Wal-Mart. So that's not good news. And it seems that this has been motivated by economic issues in both countries. So the Chinese have been going through a credit deleveraging of sorts and are also dealing with the effects of U.S. tariffs to a secondary or lesser degree. Meanwhile anybody who paid attention to the news over the holidays has seen the U.S. market all sorts of jittery days in very large part to uncertainty with respect to U.S. China trade and this potential decoupling of the two economies which are highly integrated which we know from the Apple report and so forth. And so it seems like you know everybody is really wanting to make a deal. In fact the best way the way that I've been putting it is that you know with President Trump you have a tariff man versus market man tariff tariffs. Market man was the stock market. And so it seems like market man is winning the battle and that the two sides are angling towards a deal. The question though is what kind of deal we are going to get.
Guy Benson: I just wanted to make a point quickly which is the markets have been a basket case as you do over the holidays you know down a thousand points up 700 points everyone reacting with these wild swings all over the place. There have been a number of analysts saying oh this economy is starting to look a little scary but things were going really well and now should we be looking at a softening or a downturn. The amazing December jobs report dropping like well that's terrific. It seems like a lot of conservatives who are very pleased with the deregulation like me very pleased with the tax reform like me are anxious that the trade policies could throw a blanket a wet blanket over what should be an even better economy. So that brings us to your next question that you just referenced in your view if this deal is going to go down in the next couple of weeks here between the U.S. and China a new trade structure realistically based on what you are seeing what you are hearing what you are reading. What is a best case scenario view of what that deal could look like and more of a worst case scenario.
Scott Lincicome: I mean I think case is an agreement to remove all of the tariffs on both sides and to establish some sort of long term bilateral framework for economic reforms on the Chinese side and some economic reforms on theU.S. side as well. You know it is not very well reported around here at least that the United States imposes tons of different fair trade duties of sorts on Chinese imports restricts Chinese investment. There's also these sorts of things. And so you know there's there's both there's things that both sides could give that would actually lead to a harmonious result. And do it in a time frame that that could allow for those types of reforms to take place. I think that's your best case but I don't think that that's quite likely. It seems more likely that we're going to get some sort of mishmash agreement where some of theU.S. tariffs are going to remain in place. Some might go away. The Chinese might agreed to some sort of purchases of soybeans and natural gas and a few other things and they might agree to a longer term plan for reform and then we just wait and we're all back at this in six months or a year when the deadlines up and markets start freaking out again. And we do it all over again.
Guy Benson: What do you think Scott Scott would there be any opportunity to rectify some of the Chinese malfeasance that have been bonafide real issues of Trump's right about like IP theft and that kind of thing.
Scott Lincicome: Yeah I mean I think there's a shift for some superficial reforms but the deeper reforms are going to take time and the Chinese are going to do that on their schedule and are not going to do it on President Trump. At least you know for the most part. And so I do think that you know you're going to see some olive branches and you know one of the things that's not talked about a lot is that the Chinese government itself has said that they want to encourage a lot of internal reforms. They want a more consumption based economy and one that's less based on investment and exports. But you know they want to do it on their skin. And so whether that is compatible with some of the president's demands on intellectual property you know we'll see.
Marie Harf: Scott last question we have a little over a minute left here but we want to get your take on the new NAFtA and whether we talked to you about this before but this is sort of a political question but also a trade question do you think what will it look like when it actually comes up in Congress in the U.S. Congress for debate. Do you think it will pass
Scott Lincicome: As it now stands it doesn't look like it. You know the House Democrats have been pretty clear that they want to see actual changes to the text of the agreement. And without that it doesn't make much sense for them politically to give Trump a win. I also think you're going to see some Republicans oppose this. Guys like Pat Toomey for example in the Senate who think that it's actually a step backwards from NAFTA. And so you know you combine all that together and it sure looks like a tough road to hoe.
Marie Harf: You should trademark that. I would I would give you five hundred dollars if Pat Toomey used that on the Senate floor. I really I actually I would pay up on that on that. I'm not taking that bet. Careful though. You never know. You never know.
Marie Harf: Scott thank you so much for joining tonight. We will keep watching and whenever they decide to take up NAFTAq keep watching what's going on with China. And we'll have to have you back because a lot more we didn't get to tonight.
Scott Lincicome: Thank you. My pleasure.