So, uh.
How 'bout shortly?
[Laughs] Uh, good morning, America.
Yeah. Good morning. Mr. Navarro.
I hope ABC doesn't sue me on the trademark. Let me do, uh, just a couple things for you, then we'll take a few questions. Um, because I came out this morning to talk to, uh, Maria Bartiromo on, uh, on Fox Business for a very specific reason. There's been a lot of news in the world, and one of the things that happened this week, which was really important that didn't get virtually any ink, was an increase in the hair, tariffs on aluminum and steel from 25% to 50%. Uh, and that's really important for this country because steel and aluminum are critical to our national security.
Uh, and President Trump began the process of reviving those two industries back, uh, in his first term, but Joe Biden let that go by the wayside. We lost, uh, two major smelters in the aluminum industry, which is a lot, uh, during Biden's regime. And then, um, the steel industry, we've seen a dramatic, uh, fall in its capacity utilization.
Uh, its profitability was negative in the fourth quarter, uh, of 2024. And we can't tolerate, the problem that we're facing, I mean, you may think 50% tariffs is, is, is high, but the problem we've been facing is that we have so much overcapacity of steel in the world because of China. Uh, China's by far the most massive steel producer.
What China's been doing is dumping that steel in the market, and they do it, uh, directly, but they also do it through what's called transshipping. And if you know this term, it, it's basically when China uses other countries, uh, to ship and avoid tariffs and things like that into this country. Um, in this case, um, one of the worst offenders is Vietnam.
We, we saw the, eh, this is like interesting math, we saw Vietnam's deficit with China go up by about $16 billion last year. It's surged to the highest on record, and at the same time it's surplus with the United States surged, uh, up to 12 billion, so you can see kind of what's going on. And if you look at the different products, the, uh, the rebar, the standard pipe, uh, the oil-country, tubular grid stuff and steel, it's all coming in, uh, from Vietnam.
It's coming in also from, uh, Korea, Taiwan, Japan. And so this action by President Trump is really important. Same thing with aluminum. We wanna get our smelters back. I think one of the things we've already seen, um, with respect to the aluminum industry, is we've had the announcements of two new smelters, great news, Century Aluminum, uh, and, uh, also a conglomerate from the Emirates.
Okay, that's aluminum of steel. I, I'm sure you wanna talk about the Elon Musk, um, issue. The only thing I want to, uh, talk about with respect to that, and again, I, I, I was on Fox Business, I got to talk to investors. I did a piece for The Hill this last week, which goes over the following numbers. What you do is when you look at the Big, Beautiful Tax Bill, uh, and you evaluate the claim by the Congressional Budget Office, that has been widely disseminated by the press, that the bill will add to the debt in th- the order of magnitude of several trillion dollars over the next 10 years.
It's just dead wrong. Uh, for two reasons, one of which the CBO has already confessed to. First of all, the CBO assumes a growth rate of 1.7% for the GDP, which is absolutely anemic. When you simply increase that by a point, which is consistent where we think that forecast is going to be, it's a $2 trillion swing in the amount of revenues you raise because when you grow faster, you generate more tax revenues.
It's just, just simple math. And lest you think, uh, that we're speculating, we have history on our side as we always do, because this is the second term. In the first term, the CBO did the same thing during the tax bill of 2017, when we got that tax bill passed. They underestimated growth by about a point and, and therefore underestimated how much money we would actually do. And it's a case of, there they go again.
So when you correct for that, you get halfway to, to the point where this $5 trillion swing happens. And then, which was really heartening to me, and I don't know if my piece in the hill had anything to do with it, pointing out that when you count the t- tariff revenue, it's another $2 trillion, so it's a $5 trillion swing.
So, um, with respect to what Mr. Musk has been saying about the big, beautiful bill and overspending and things like that, I think that, um, that dog won't hunt when you do the math properly. And that's all I want to say, um, about that. Uh, so what, I'll take a few questions. Let's keep it, I'm here as an economist and an analyst, not, not, I don't wanna do a --
[Inaudible] identification with --
Okay, hang on. Yes, ma'am.
This relates to -- This does relate to the economy.
Yes ma'am. Yes ma'am.
But it is related to Elon Musk as well. I'm curious what you make of Elon Musk's comments that Trump tariffs will send US to recession later this year.
Well, uh, look. Elon Musk does not like tariffs. Uh, full stop. He's made that clear from day one, and going back to the first term. He's not a tariff guy, which is fine, we can have disagreements about it. But I would simply say that everybody, uh, during our first term who said that the tariffs were gonna be recessionary and inflationary were obviously, obviously and wildly wrong.
All we got was price stability and growth. And again, if you do the numbers, if you understand how gross domestic product is calculated, okay? If you've ever gone through that math, it's four engines of growth. It's consumption, investment, government spending, and what we call net exports, net exports, which is the difference between what we sell to the world and what they sell to us. And when you have them selling us more than we sell them, in the math of the GDP, growth goes down.
So every quarter when those numbers get reported, when you see what the net number is, that number would probably be about a point or more higher if we didn't run a trade deficit. So the idea that, that these tariffs are somehow going to, uh, be recessionary is wrong. I mean, there's, there's two things going on. With the tariffs, we make more things here, we employ more people in the short run, and in the longer run we get more capital investment, and therefore we employ more people and produce more goods.
So the, the math doesn't work there. Ma'am.
Well, given your disagreements on tariffs with Elon Musk that you just laid out, are you [Inaudible] like he's out of the fray?
No, I mean, I'm not glad or whatever. It's, uh, p- People come and go from the White House. We -- he s- was a special government employee with an expiration date. Um, I work with the DOGE folks a lot here and, um, I've got a, a very special project, which at some point I'll come out here and talk about with them, which, which has been great.
We've gone into one particular agency, and we've taken a computer program that's very important, uh, that is run like a 1950s IBM punch card operation at great expense to the American people. And (laughs) we're gonna turn that, uh, from a Model T into, uh, a Ferrari. And it's gonna transform a bunch of people's lives and save American taxpayers a lot of money.
So --
What's the program?
-- uh, that's good.
Which program are you [Inaudible]
Didn't I just tease you --
The --
-- and say I'd be out here again?
I had try. I had to try.
Uh, yeah. You had to try. So --
What's, what's the timeline?
Stay tuned. Okay? So, um, y- Do you have a question, ma'am?
Mr. Navarro, will the falling out that we've seen on social media impact DOGE efforts into the future?
No, no. I, I -- Look. Waste, fraud, and abuse unfortunately, is alive and well in America. And, and the DOGE folks here, uh, they're, they're good folks. Uh, and w- and when you work with 'em and bring with i- to, to them kind of the institutional knowledge of how bureaucracies work, and, and what's important in a bureaucracy and what's not, uh, when you wed that, it's a, it's a great thing.
So we're happy. I don't -- So I, I had my piece on Elon. I'm happy to talk about other things, but that one's over. Yes, ma'am.
Can you give a status update on the trade talks with other countries?
Yes, ma'am.
What we can expect to see in the next few --
I never thought you all would ask. Uh, there was a, a very good phone call yesterday, it ran about 90 minutes, uh, between the two presidents, um, of the, the, the greatest economic power in the world, the United States, and one of the two most populous countries in the world. Um, in China, we've set in motion a process in which, um, as President said, uh, Jamieson, Howard, and Scott will be going.
That's, uh, Secretary of Commerce, Lutnick, Secretary tre- of the Treasury, uh, Scott Bessent, and u- United States Trade Rep, uh, Jamieson Greer. And, uh, there was a clear, um, mandate between, an understanding between the two presidents. And we expect that that, uh, meeting will take place, um, within seven days.
And, um, either I or more likely, um, Scott, Howard, Jamieson will come out to the sticks and, and let you know, uh, or the president lets you know about it. But, but it was a very good call.
Mr. Navarro, may I ask a question about you [Inaudible]
Um, one for me. Can you clarify the meeting with the cabinet?
There you go.
Where's the negotiations with Euro, with steel and aluminum stand at the moment? The negotiation after the meeting in Paris?
Uh, uh, I, I don't under- understand. They -- We put tariffs on and the pa- president has a policy of no exemptions, no exclusions, full stop.
Thank you.
Okay?
[Inaudible]
All right. I -- That's about it. I think I've been generous.
-- on rare earth minerals?
Just, just the German chancellor meeting yesterday.
Oh, I, I have no comment on that. I -- It's not my lane. Hey, uh, anytime, just, uh, I've come out to give you a bunch of time.
So what's the president, when he said, "Progress was made on rare earth minerals in the call with Xi," what, what does the US expect to see?
Well, let's, let's see what happens with the negotiations. But the president was very clear that, that the, the rare earth issue, uh, will be key to that negotiation. And the two presidents have a very clear understanding of the outcome. Okay?
Sir -- [Inaudible]
All right. Thank you very much.