Press Briefing by NEC Director and Assistant to the President for Economic Policy Larry Kudlow | Eastern North Carolina Now

    I'll go over here, to be fair. Yes? Go ahead.

    Q Thanks. You had talked about China a little bit earlier, so I wanted to get your response to the announcement from China earlier today. They were saying they're going to lift some of the restrictions on foreign autos, but also they imposed new duties on sorghum. Does the U.S. see this as sort of a ratcheting down of the trade tensions between the U.S. and China? Or what's your response to those actions this morning?

    MR. KUDLOW: Whenever they're moving in our direction in a conciliatory way, whenever they're lowering barriers, that's a good thing. That's good for them, it's good for us, and it's good for growth on both sides and the rest of the world. When, however, they raise barriers, as they seem to be on the farm issue, that's not good.

    Yes.

    Q Thank, Larry. I just want to follow up on your answer to Hallie's question about the IRS. You know, people are filing their personal income tax returns today. The system is down. You seem to not share a whole lot of concern for their plight. What is your message to the American people who are having difficulty filing their taxes?

    MR. KUDLOW: Look, the IRS will straighten it out. I don't know the nature of this whole story. I've just gotten wind of it.

    You know, part of our tax policy, and part of the success of the tax cut plan is to simplify. And as the President and many others have said, this will be the last filing of the old, highly complex policies. It's not perfect, but we're gaining on it. That's different than whatever technical breakdowns there may be in the Internal Revenue Service. They'll fix that.

    And we probably have more work to do on the simplification. We probably do. But this is a great down payment. And I do want to bring back this idea that lower tax rates; child credits, doubling the child credit; doubling of the standard deduction; lower small and large business taxes are all very positive all across the board, and the economy is responding positively.

    We are in a growth mode. We're running a percentage point above the prior baseline. And if we keep that up, either way, the deficit will be much, much less than it's now scored in CBO and elsewhere. These are good things.

    But I can't - I honestly don't know the inners of this. Was it a computer breakdown? I mean, yeah. Well, I'm sure they can fix it.

    Yes.

    Q Thank you, Larry. A question for you, and then one for Matt. For you: The Japanese were the only major American ally that was not granted an exemption on the 232. Most people expect the Prime Minister to press the President on that. Do you see a path for granting Japan an exemption?

    And then, just quickly to Matt. He'll also - the Prime Minister - no doubt ask about intermediate-range missiles. Do you expect the President to give him comfort that not just intercontinental missiles, but medium-range missiles will be something that he'll push for in the summit with Kim?

    MR. KUDLOW: To your first question, it will be under discussion. It's a key point on the agenda.

    Q Do you see a path - a way that they could be granted?

    MR. KUDLOW: I just don't want to speculate on the outcome of the meeting.

    MR. POTTINGER: You know, certainly the entire world recognizes the danger posed by the entirety of the missile arsenal of North Korea. It's why the entire world is now implementing U.N. Security Council resolutions that were passed - four of them in this administration, the toughest ones yet. And all of them passed unanimously.

    So yeah, we're certainly going to be taking into account the full range of threats that North Korea poses to regional security, to the American people, and to our allies.

    Q Okay, questions for each of you. First, Larry, can you talk a little bit about the relationship that the President sees between trade and security - marrying these two issues with Japan?

    And then, Matt, I also had a follow-up question about what John asked about - what assurances that the U.S. will be able to provide Japan before sitting down with this meeting with North Korea. Because as you said earlier this week, the President and Prime Minister Abe are in constant contact. They're talking frequently. So, surely, the President is well aware of what those concerns are that Prime Minister Abe has walking into this meeting today. So what is he prepared to offer Japan to mitigate some of those concerns?

    MR. KUDLOW: President Reagan used to say, strong at home, strong abroad; weak at home, weak abroad. I believe President Trump shares that view, and that's why economic growth is so important. That's not the whole security story, obviously.

    But if you're looking for linkage, it's right there. And our economy is now producing at a faster rate. This provides us with, first of all, more resources to do a lot of things, including national defense and security.

    Second of all, the U.S. has become, frankly, a magnet for investment. We have become the hottest investment destination in the world. And that's even beyond the repatriation of a couple of trillion dollars in the tax law change. This is, you know - we have lowered our barriers on regulations and tax rates and so forth, and so money is flocking to invest in the United States. That's the first time we can say that in many, many years, so that's a big plus.

    And in terms of our relationships around the world, with respect to security - I'm not a security expert, but I would just say a stronger economy here puts us in a very strong position around the world. Very strong position. And that's a good thing.

    MR. POTTINGER: Like I said before, the reassurances that the President has provided from the beginning of his relationship still stand. And I don't think that Prime Minister Abe will leave Mar-a-Lago with anything other than a high degree of confidence in the health of the alliance, including as we go into a summit with the North Koreans. I know that there's some Japanese press in the back. I mean, we could tap on -

    MR. KUDLOW: I got to go to deep right field. I promised.

    Q Thank you so much. So in terms of deliverables, what does President Trump hope in terms of concrete deliverables coming out of this? Is there a possibility 232 exemptions could come out of this, or the beginnings of a bilateral free trade agreement, or any other concretes?

    MR. KUDLOW: You know, as I've said before, this is all on the table. That's why this is such an important meeting. But I don't want to get ahead of that curve. I really don't.

    Now - yes, sir. You've been very patient. Thank you.

    Q Thank you very much, Mr. Kudlow. You have been stressing the importance of the trade coalition of the willing, I think including Japan and Europe, which, in my view, is very compelling. But on the other hand, if the U.S. pushes ahead too hard with this trade agenda - prioritizing bilateral agreement - that may weaken your case or that may not work in a positive way for the U.S. to encourage better China's behavior on trade to -

    MR. KUDLOW: It's just - look it. My statement, which is catching on, I'm glad - this trade coalition of the willing that I've been talking about, and others have been talking about, is really aimed at China. I mean, China is a first-world economy, behaving like a third-world economy. And with respect to technology and other matters, they have to start playing by the rules. And the President emphatically - empathically - supports that view. That is the essence of his policy, "Play by the rules, or there will be consequences." It can be negotiated out if it's satisfactory to both parties.

    But I think - my point about China is: Our complaints, if you will, particularly with respect to technology but not only - you know, you've got various trade barriers to come down. You've got various market openings to come down.

    But with respect to these disputes, the rest of the world is with us. The President hasn't consciously sought this, but it's happened. And it's a good thing. So I think it strengthens our case. And I don't want to get caught up in bilateral this, bilateral that. Europe, Britain, Japan, Asia, capitalist countries in Asia, Australia - they're all behind us on this. And so I'm hoping that China reads that carefully and responds positively.

    Yes.

    Q Slightly off-topic here, but if you don't mind, is there confusion inside the administration on new sanctions toward Russia?

    MR. KUDLOW: No. I think the issue here is we have a set of sanctions, and additional sanctions are under consideration but not been determined.

    Q So why did Nikki Haley say that sanctions were coming on Monday?

    MR. KUDLOW: She got ahead of the curve. She's done a great job. She's a very effective ambassador. There might have been some momentary confusion about that. But if you talk to Steve Mnuchin at Treasury and so forth, he will tell you the same thing. They're in charge of this.

    We have had sanctions. Additional sanctions are under consideration but not implemented, and that's all.

    Yes.

    Q Thanks. Just a quick question for Matt. Can you speak to the domestic political considerations that Abe brings to the table? Has the President been briefed on that? Is he of a mind to do or say anything during the summit that might boost Abe's standing at home?

    MR. POTTINGER: The President is, of course, well-briefed on the relationship, what's going on - to some extent, domestically in Japan - just as Prime Minister Abe is being briefed as he's flying right now, getting close to landing here in Palm Beach, on what's going on the domestic front here. So it's all part and parcel of the relationship.

    Sometimes they talk about the respective politics in one another's countries. They enjoy talking about it. So I don't think there's anything special to say about that at this point, though.

    Yeah. Sir.

    Q Hi, my name is Koji (ph) with the Asahi, and my question is on North Korea. And some experts think that negotiation with North Korea might be just buying their time on North Korea. So is there any possibility that Trump and Abe will talk about target year of denuclearization during their summit? Like 2020, for example?

    MR. POTTINGER: I would just say that President Trump has a team of people working for him now who have extensive experience dealing with the North Korea nuclear menace. If there is any intention by the North to merely buy time for this program, there will be an unhappy result, I would say.

    Yeah.

    Q How about target year of - target year to achieve a denuclearization?

    MR. POTTINGER: Yeah, nothing that I would comment on, specifically, about that right now at this point. It wouldn't be appropriate. Yeah.

    Q You said that the President has a team working for him now. Do you mean that a new team in place, as recently a team that was not in place, say, three months ago?

    MR. KUDLOW: There are newcomers and there are old-timers.

    Q (Inaudible) the team that's around the President now is now more attuned to, as you said, the menace posed by North Korea than the team that was around him in the past?

    MR. KUDLOW: No, no. No. No. It's just a lot of good people. And as I say, there are some newcomers and there are some old-timers.

    Yes, in the back. Yes.

    Q I just want to try one more TPP question for you. Just a second ago, you said that the trade coalition of the willing is relating to China, but then earlier, in saying that the trade discussions with China is in no way related to TPP. Isn't there some sort of a contradiction there in that TPP essentially would be that trade coalition of the willing?

    MR. KUDLOW: Not necessarily. Remember, this coalition is global. It's not just Pacific Asia. And I think everybody is heartened at the positive response from the European countries and Great Britain. That's why I've tried to delineate not to mix the two up. They're separate tracks.

    Yes.

    Q I just have one more on tariffs. Are you expecting that the Prime Minister will ask for an exemption on the steel tariffs? And what is the President considering he would offer?

    MR. KUDLOW: I wouldn't be surprised if he did.

    Q If he asks?

    MR. KUDLOW: Pardon?

    Q If he asks, that's what you would not -

    MR. KUDLOW: Wouldn't be surprised.

    Q And then what? And then what?

    MR. KUDLOW: I can't say. I mean, let's see what happens. Let's see what happens. If you want Kudlow predictions, you're not going to get them. (Laughter.)

    Q But you're so good at that.

    MR. KUDLOW: I know, but that was another life. (Laughter.)

    Other questions, please. I don't want this to get out of hand.

    Q Larry, can I just ask -

    MR. KUDLOW: Sorry?

    Q What would it take for them to get an exemption?

    MR. KUDLOW: You know, there's no strict conditionality. There will be discussions about that. The President has some very clear views on the matter, and he will communicate them.

    Q One question for Matt, if I could. Just on this news about South Korea saying that South Korea and Kim Jong-un could sign some sort of peace treaty, if not at the summit in Pyeongchang, that maybe soon after that. How would that change, if you could, the whole calculus of the U.S. meeting with Kim?

    MR. POTTINGER: Look, the President is focused on a potential summit here that he's accepted an invitation to attend. He's staying in very closed coordination and contact with President Moon. And at the level below the Presidents, there's probably a higher degree of coordination taking place than has ever taken place since the end of the Korean War. There will be plenty of time to talk about the goals of that inter-Korean summit and how they might mesh with goals for President Trump's own. But there's nothing I want to go into specifically about it today.

    Yeah.

    Q Matt, can I throw one more to that? And forgive the millennial slang on this, but given - I mean, you know the President and Shinzo Abe have had a close relationship. There's, as you know from these questions, trade tensions, there's discussions of their involvement in any kind of summit with North Korea. Are they still in a bromance or has that cooled off? (Laughter.)