The Exchanges

Q Would that actually go into, congratulations, will that go into a sovereign wealth fund that you've been talking about and the president has been talking about?

A No, I think this is, this is separate. The, what the president says about the sovereign wealth fund is we do a sovereign wealth fund that invests when we've done paying off our deficit, right? First, we got to pay off our deficit before we're trying to make money. So what this is, is this is the Japanese government says, I will finance and I will pay for, not finance, I will pay for. You want to build a nuclear facility? Build it. You want to build 10 nuclear facilities? You go build them. You want to go build a pipeline, you go build it. You want to build, ah, fabs, you go build it. Whatever you think is necessary, you build it, we'll pay for it, you net lease it to an operator, and we'll split the lease payments, 90 for you, 10 for Japan. It's a blockbuster, if there ever was one.

AI assessment note: “No, I think this is, this is separate.”

Q Well, let's talk about the big issue, China. Where are we going to wind up with China? Reciprocity, TikTok, the whole shebang. Is this going to be one big grand bargain? Taiwan, TikTok, there's so many issues. Is there any way to thread the needle on this?

A I think the way I think about, uh, China is draw a line, okay? There's below the line, like they sell us, uh, baby clothes, and we sell them soybeans. That stuff, we need to do more of it. We want to buy more of that. They want to buy more of ours. We need to open that, get this detente stuff, you know, where we're just flowing below the line. Got it. Above the line would be, you know, our best chips. Blackwell chips, H, you know, 201 hundreds, right? We don't want to sell them our best stuff. They don't want to sell us hypersonic missiles either, right? We would say, If it was open, we'd say, well, let's take a couple of your hypersonics. Let's see what you got. Yeah. So that's not happening. So that's above the line. And then the question is, what's the line? That's the proper negotiation, right? Be open below the line. Let's get it on. Good for both economies. Above the line, we're competitors. Let's just call it what it is and stick with it. And then what we can really negotiate when we're together is the line.

AI assessment note: “what we can really negotiate when we're together is the line.”

Q But it's an incredible deal structure. How do, how do you get to that?

A Well, I got to that, so this, I came up with this idea in, uh, in January, and then I kept restructuring it to try to figure out how to do it, because I met with some, uh, Japanese senior executives while, uh, before election, before inauguration day, and they said, you know, I understand your tariff policy, but Japan's never gonna open. Right? They're just never gonna open. I mean, in, in 1850, Perry took an armada and tried to break it open. In 1850, couldn't open it. Uh, opened the Japanese market. So, Come up with another idea. And the other idea was they buy it down. And so what structure we used, how they did it, they offered us, they originally started offering us loans or loan guarantees, and the president's like, I don't need someone else to loans. Like, I don't need to borrow money from someone else. And then finally we figured out that really it just needed to be committed capital to back projects that we want. And so it was five months in the making. And, and I'm me talking to the president about, about doing different structures. And eventually in the middle of last week, we came to the structure. The president said, okay, I like it. Let's bring him in and talk. And then the president made the deal better.

AI assessment note: “we figured out that really it just needed to be committed capital”

Q to AI. And I think that part of this is, In the, uh, the action plan and in the EO's being signed later today, but this is a broader question for American businesses. I work in agriculture. It's very hard to access overseas markets, um, and there's not a lot of parity. Has that become key to some of these conversations, and where does it sit on the priority rung?

A That's the priority rule. So the rule is you must open your market. Open, open, open. And, and let's be clear, these markets have never been open. We have Stockholm syndrome in America. These markets have never been open. There's tariffs, there's non-tariff trade barriers, like you can't sell an American car in these locations, whether you want to or not, you're not allowed, or they won't buy them because the seatbelt is like this, or that this is like, they make these rules. So we are demanding the markets are open, and the issue with Japan was they were never going to open it. So what are we going to do? And the answer was, Right, that's where he came up with this, uh, you know, signing bonus, right?

AI assessment note: “That's the priority rule. So the rule is you must open your market.”

Q Do you think that this mercantilism, was it a purposeful strategy to weaken America? Or do you think it was just a byproduct of capitalism?

A The answer is, uh, yes. It, the Chinese economy is one of overproduction. They have 50 mayors, provinces, and each of those provinces is trying to succeed. So each of those provinces wants to build an electric car company, and the government puts in all the money, builds the capital, gives them the power, invests. So if you're the mayor, you want the winning electric car company, because remember, China does not have oil and natural gas, so they have to build electric, because they have coal. Right? So they have to build electric. We don't. We're being fools to think that we should have batteries and everything that they make that we don't. That's just foolish. But they, so that means if you have 50 mayors, and they all have, what, one electric car company? Nah, nah, they're probably gonna have two just in case. So that's a hundred electric car companies, and they're all trying to kill each other, subsidized by the government, so they can cut their price 30% Why? Because the government just says, look, let's just try to undersell everybody else, and then they make so many cars. What do they do with all these cars?

AI assessment note: “the Chinese economy is one of overproduction. They have 50 mayors, provinces”

Q into April first and- April second. April second, sorry. And bring us into the room debating tariffs, debating where you wanted to start, debating the game theory. What were the puts and takes, and how did you come up with the decisions you made? And then if you could just reflect back on what went right, what would you want to redo, and what was maybe, and still is misunderstood?

A So, the president in his first term, um, he's been talking about tariffs, and how the trade deficit of the United States of America is really a ripoff of America. That, uh, people who don't weigh in very deep say, well, you have a, a trade deficit with the supermarket, right? You know, I mean, you're always buying from the supermarket, so you have a trade deficit with the supermarket. That's, that's just silly, right? If you think about it, let's say there are two islands, right? One produces and one invents. So the inventor lets the other island produce. And keeps buying it from that other island. Pays them the money, and then that other island uses the money to buy the inventor's island. And over a period of time, the producer owns The inventor's island. And the inventor works for the producer because he ran an infinite trade deficit and kept paying his money away. So what's supposed to happen when I was in college, my, uh, you know, freshman and sophomore professors basically said, if you run a trade deficit, you'll keep taking your silly paper money and giving it to them. And buy their wine, and buy their cars, and buy all their cool stuff, and sooner or later they're gonna say, hey, I don't want your stupid paper, and your dollar would devalue. You wouldn't be able to buy their stuff, and it would all bounce. And that's sort of free foreign exchange floating currency theor…

AI assessment note: “he's been talking about tariffs, and how the trade deficit of the United States”

Q Korea. You did the deal with Europe. You did the deal with the UK. What's sort of out there that's still there? I think India's kind of still out there, although it seems like they are capitulating a little bit. I saw that they just bought a lot of liquefied petroleum gas from the United States in November. What are the big sort of hot button places that you want?

A I'll tell you a story about, uh, India. So, um, if you remember, so I did the first deal, the UK, and we told the UK that they had to get it done. By two Fridays from now. That that was the date. That the train was gonna leave the station by two Fridays, because I have a lot of other countries doing things, and, you know, if someone else is first, they're first. And President Trump does deals like a staircase. First stair gets the best deal. You can't get the best deal after the first guy went. Everyone says, I want the UK deal. I want the UK deal. The answer is no, they were first. They took the chance. They moved quickest. They're first. Second up a stance.

AI assessment note: “I'll tell you a story about, uh, India. So, um, if you remember”