Transcript of ‘CHESS GAME’: Scott Bessent reveals status of US-China trade talks

FOR MY TASTE AND THAT IS THE RIFF. DON'T BE ALARMED, IT'S STILL THE KUDLOW SHOW ON FOX BUSINESS. CPI AND GREAT NUMBERS TODAY AND >> A LOT OF ECONOMISTS SAID I GOT THE NUMBER RIGHT AND MISSED COMPONENT. THESE ERROR ON PRICES AND HAS NOTHING TO DO WITH TARIFFS AND THINKING TDS USED TO MEAN TARIFF DERANGEMENT SYNDROME AND TURNING INTO TARIFF DUMB SYNDROME. WHEN YOU'RE IN THE WHOLE STOCK DANCE. LARRY: YES, STOCKS ARE MOVING AND 10-YEAR IS 429 AND HELD STABLE NICELY. CAN YOU GET STEVE MIRAN IN THE FED CONFIRMED BY THE SENATE IN TIME FOR THE FOMC MEETING NEXT MONTH? >> WE'LL SEE. HE'LL BE A GREAT VOICE. I'VE KNOWN STEVEN A LONG TIME AND HE'S THOUGHTFUL AND METHODICAL AND A LOT TO SAY ABOUT THE FED. LARRY: HOLDING GRAVITY FOR THE FEDERAL RESERVE BOARD AND IN TERMS OF POLICIES AND GOING FOR THE POLITICS ASIDE AND IN TERMS OF POLICY, JAY POWELL HAS BEEN HANGING AROUND AND NOBODY REALLY UNDERSTANDS WHY BUT NOBODY KNOWS WHAT MODELS ARE AND NO TRANSPARENCY AND STEVE MIRAN, IT'S GOING FOR THE SMART CHAP AND YOUR GUY AND PUTTING UP FOR THE FED. THAT CHANGES EVERYTHING. JOSEF WEN THE BIG ECONOMIC REVISIONS AND POOR QUALITY AND DATA AND THE NUMBERS AND FED GOING TO BE CUTTING IN JUNE OR JULY AND I THINK THE REAL THING NOW IS GOING FOR THE RATE CUT IN SEPTEMBER TO MAKE UP FOR LACK OF DATA AND AGAIN BACK TO THE CPI NUMBERS ARE FANTASTIC. LARRY: MIRAN COULD STAY ON AND RENOMINATE HIM IF YOU WANTED TO. >> YES, AND WE HAVE TWO SEATS AND SEAT FOR THE CHAIR AND THEN THERE'LL BE ANOTHER APPOINTEE JOINING SO WE ACTUALLY GET TWO APPOINTMENTS AND PRESIDENT TRUMP WILL HAVE A MAJORITY OF THE BOARD IN DC. LARRY: YES, INDEED. YOU'RE WITH A WHOLE BUNCH OF CANDIDATES AND HE'S TALKING ABOUT IT AND CHRIS WALLER AND KEVIN WARSH AND HEAVEN HASSETT AND SO FORTH AND OTHER NAMES AND CASTING A WIDE NET. IT'S ABOUT ECONOMICS AND WHAT'S BEST FOR THE AMERICAN PEOPLE AND THE ECONOMY. I'M LOOKING AT THREE THINGS: MONETARY POLICY, REGULATORY POLICY, AND ABILITY TO RUN AND REVAMP THE ORGANIZATION BECAUSE IT'S REALLY GOTTEN BLOATED AND I THINK THIS BLOAT PUTS ITS MONETARY INDEPENDENCE AT RISK. LARRY: YOU'VE SAID CORRECTLY THAT THE FED NEEDS TO TOP TO BOTTOM AND STRONG GROWTH CAUSING HIGH INFLATION AND OUTDATED IF THEY EVER WERE WITH 50 YEARS OUT OF DATE AND I THINK YOU JUST NEED A THOROUGH GOING AUDIT OF THE WHOLE INSTITUTION AND THE SIZE OF IT AND RESERVE SURROUNDING THE COUNTRY AND STAFFING AND I THINK I SAW A CHART AND FED STAFFING UP 300% IN RECENT YEARS AND THIS IS NOT EXACTLY A DOGE CANDIDATE. >> THIS IS WHAT HAPPENS WHEN THERE'S NO ACCOUNTABILITY AND THE FED DOES NOT ANSWER TO CONGRESS AND PRESIDENT TRUMP IS FOCUSSED ON THE BUILDING AND THE PROBLEMS AT THE BUILDING ARE FOCUSSED ON THE PROBLEMS IN THE FOUNDATION. >> GOING FOR THEM AND JAY POWELL AND IT'S $3 BILLION WORTH OF REN NATIONS VERY THE THREE BUILDING ANDS IT ALL COULD HAVE BEEN DONE FOR $50 MILLION AND KNOW AS THING OR TWO ABOUT THIS AND THINK HE'LL BRING A LAWSUIT? TALK TO HIM ABOUT IT? >> I DON'T KNOW ABOUT THAT. WHAT I DO KNOW IS I'M RENOVATING MY OFFICE AT TREASURY AND THAT'S HOW WE ROLE AT PENNSYLVANIA. LARRY: CHINA EXTEND TO NOVEMBER 2025 AND THAT'S ANOTHER THREE MONTHS ESSENTIALLY AND KEY ISSUES IN THE DISCUSSIONS WITH CHINA, WHICH YOU ARE LEAVING? >> CHINA IS LIKE A MULTILEVEL CHESS GAME AND RIFLES ARE OUR ALLIES AND DURING 60S, 70S, 80S AND THROUGH THE 90S BEGINNING OF THE OUGHT, BIGGEST ECONOMIC RIVALS WERE THE EUROPEANS AND JAPANESE AND SOVIET UNION UP TILL THE WALL CAME DOWN AND MILITARY POWER AND SMALL ECONOMY AND WITH CHINA, WE'VE NEVER SEEN ANYTHING GOING TO BE REBALANCED TOWARDS MORE MANUFACTURING AND IT'S MY BELIEF AND MOST OUTSIDE OBSERVERS BELIEVE THAT THE CHINESE ECONOMY IS THE MOST IMBALL LANGUAGESSED AND UNBALANCED ECONOMY IN MODERN TYPES AND REBALANCE TOWARDS THE CONSUMER SO COULD WE DO THAT TOGETHER AND IT'S VERY HELPFUL AND MEETING WITH THEM AND COUNTER PARTS GOING THROUGH THERE AND XI INVITED PRESIDENT TRUMP. WE'LL SEE. NOT GOING TO GET AHEAD OF THE PRESIDENT ON THAT MEETING. LARRY: KNOW WHEN THAT'LL BE? >> THERE'S NO DATE. THE PRESIDENT HASN'T ACCEPTED YET. LARRY: I GET IT. YOU DON'T WANT TO TALK ABOUT THAT . RARE EARTH MAGNETS, CAN YOU MAKE A DEAL ON THAT? THAT'S A IMPORTANT ECONOMIC AND NATIONAL SECURITY ISSUE, RARE EARTH MAGNETS COMING TO THAT AND IT'S GOING FOR THEM AND HAD THAT WAS TALKING ABOUT IT IN GEE KNEE VASCULARIZED AND LONDON AND STOCK -- GENEVA AND LONDON AND STOCKHOLM AND MOUNTAIN PASS AND U.S. GOVERNMENT TAKE AGO STAKE IN IT AND WE'RE ALSO WORKING WITH FOUR, FIVE, SIX OTHER COMPANIES TO MAKE SURE WE CAN WEAN OURSELVES AWAY FROM THE DEPENDENCY ON CHINA AS A POINT OF SINGLE FAILURE FOR THE RARE EARTH MAGNETS. LARRY: IT'S HARD BUT IN THE NEXT THREE MONTHS OR SO YOU'LL BE NEGOTIATING HERE AND THERE TO SAY IT'S ON THEM AND EXPECT THE TARIFF RATES TO REMAIN STABLE. UNIVERSITY OF IDAHO ROOMMATESES IS 25% AND THEIRS IS PORTION 35% AND MORE DETAILS IN THE TARIFF RATE AND SAY ANYTHING ON THAT? >> ANYTHING I COULD IMAGINE CHANGES AND I THINK THERE'S GOING TO HAVE TO BE A LOT OF RUNWAY HERE, 20% OF THE TARIFFS ARE BASED ON THEES -- WHAT'S CALLED TETANAL TARIFFS AND CHAI 2345 IS THE -- FENTANYL TARIFF AND CHINA IS THE SOURCE AND SUPPLIER AND PRECURSOR CHEMICALS FOR FENTANYL AND MAKING WAY TO CAN DARK MEXICO AND ENDING UP IN THE U.S. KILLING 100, 200,000 CITIZENS LAST YEAR AND GOING TO BE UNACCEPTABLE AND WE'LL NEED TO SEE MONTHS IF NOT QUARTERS IF NOT A YEAR OF PROGRESS ON THAT BEFORE THE MANAGING OF THE TARIFFS COMING DOWN AND GOING UP FOR PRESIDENT TRUMP AND I HOPE THE CHINESE WILL WANT TO MAKE SUBSTANTIAL PROGRESS. LARRY: HOWARD LUTNICK WAS ON THE SHOW NOT TOO LONG AGO AND HE CALL IT IS BUYING DOWN TARIFFS AND SO ONE OF THE BUCKETS IS NATIONAL SECURITY AND ECONOMIC FUND AND THAT'S HOW HE PUT IT AND YOU MAY HAVE ANOTHER NAME FOR IT AND PEOPLE DON'T KNOW MUCH ABOUT THIS. THE SUMS ARE VERY SUBSTANTIAL AND SOUNDS LIKE COULD BE COUPLE TRILLION DOLLARS AND GROW. ESSENTIALLY GOVERNMENT INVESTMENT HERE, IS THIS LIKE A SOVEREIGN WEALTH FUND? DOES THIS GO DIRECTLY INTO THE TREASURY DEPARTMENT AND MR. TRUMP AND U.S. GOVERNMENT HOLD 90% OF THE PROFITS AND NEW DIRECTOR RESOURCES AND THAT'S GOING TO HAVE A SENSE OF IT YET. GOING FOR THE BUYOUT AND GOING TO CRITICAL INDUSTRIES THAT WE NEED TO RE-SHORE AND A LOT OF THOSE NEED TO BE RE-SHORED AWAY FROM CHINA. SEMICONDUCTORS, MAGNETS, PHARMA STEEL, MY SENSE IS THAT IT ISN'T WHAT WILL HAPPEN. WE HAVE THESE AGREEMENTS IN PLACE WHERE JAPANESE, EUROPEANS AND KOREANS WILL INVEST IN COMPANIES AND INDUSTRIES THAT WE DIRECT THEM, LARGELY OF THE PRESIDENT'S DISCRETION. LARRY: NOT SURE WE'VE HAD ANYTHING LIKE THAT IN THE STATES BEFORE AND HAVE YOU CONSULTED WITH SENATE FINANCING AND THAT'S GOING TO BE THE WAY THEY'RE GOING. >> THE GOOD FRAMING OF THAT IS OTHER COUNTRIES AND IN ESSENCE PROVIDING WITH A SOVEREIGN WEALTH FUND. THOSE ARE GOODS. LARRY: THEY'RE GOING TO HELP US BUILD MANUFACTURERS THAT THEY LOVE. >> IT'S A HUGE SURPLUS ACCUMULATED OFFSHORE AND GOING WITH JAPAN GOING WITH $150 BILLION AND GOING WITH THEM REINVESTING THAT BACK TO RE-SHORE THE CRITICAL INDUSTRY AND DIERESESSING THE U.S. ECONOMY FROM WHAT WE SAW DURING COVID. LARRY: PRESIDENT LOVES NEW FACTORIES. HE'LL TAKE REHABBING OF OLD ONES BUT LOVES NEW ONCE. PHARMACEUTICALS AND CAR STEEL AND SO FORTH. GOING TO BE LOVING NEW FACTORIES AND THAT'S THE HEART OF THE WHOLE TRADE POLL SEAN: HE WANTS FACTORIES. >> HE LOVES FACTORIES AND FACTORY WORKERS LOVE HIM. I WAS WITH HIM STEEL WORKERS IS THEIR PRESIDENT. LARRY: THAT'S THE BLUE COLLAR BOOM. HE WANTS THOSE NEW FACTORIES. >> WELL, HE WANTS MAINSTREAM TO WYOMING LARRY: A COUPLE OF THEM PAYING UP FOR THE PRIVILEGE OF HELPING US, FINE. >> GREAT, GREAT. AS YOU JUST ANNOUNCED, WALL STREET HIT A NEW HIGH AND WITHIN THE NEXT YEAR, TWO YEARS, MAIN STREET HIT AGO NEW HIGH IS IT A. LARRY: IF THE TARIFF CORD WINS ON APPEAL, YOU'VE GOT OTHER WAYS TO PUT THIS TRADE AND TARIFF POLICY TOGETHER? >> WELL, GOOD FRAMING HERE WOULD BE IF THE TARIFF COURT RULES AGAINST US, WE WILL IMMEDIATELY BE ENJOINED AND THEY'LL LIKELY CONTINUE AND GOING TO THE SUPREME COURT IN OCTOBER THEN WE WOULD EXPECT A RULING IN JANUARY. BUT I TELL YOU, LARRY, THE AMOUNT OF MONEY THAT'S COMING IN HEAT INDEXER I THINK THE MORE DEALS WE'VE DONE, THE MORE MONEY COMING IN, IT GETS HARDER AND HARDER FOR SCOTUS TO RULE AGAINST THIS. LARRY: HOW MUCH MONEY IS RULING AGAINST THIS AND THE INVESTMENT S? >> JUST ON THE TARIFF INCOME AND I'D BEEN SAYING 300 BILLION AND 1% OF GDP AND WITH THE NEW INVESTMENTS AND THERE'S THE SOVEREIGN INVESTMENT THAT WE TALKED ABOUT AND THEN IN TERMS OF THE COMMITTED INVESTMENT BY PRIVATE INDUSTRY, YOU'RE WELL OVER 10 TRILLION. LARRY: 10 TRILLION, UNBELIEVABLE NUMBER AND STORY. SWITCH GEAR AS LITTLE BIT. OFFICIALLY NOT COMING OUT BUT TALKING ABOUT BANNING SINGLE STOCK TRADING AND AUREM VERY GOOD WALL STREET INVESTOR IN THAT BUSINESS AND NOT TOUCHING NANCY PELOSI'S INVESTMENT. GOING FOR THEM AND IT'S THE BEST INVESTOR IN THE 21ST CENTURY. >> WE'VE GOT TO DO SOMETHING, LARRY. THIS IS A DISGRACE AND PLENTY OF PEOPLE THAT GO TO CONGRESS AND IF YOU OR I OR ANYONE ELSE TRADED ON INFORMATION THEY USE AND TALKING ABOUT THE HOUSE AND THE SENATE, THEY HAVE ACCESS TO INSIDE INFORMATION AND THERE'S NO PENALTY FOR THEM TRADING ON IT. THERE ARE, I THINK THERE'S AN ETF THAT FOLLOWS NANCY PELOSI'S HUSBAND, PAUL PELOSI. AND THEY'RE UP 70%. LARRY: THEY'RE ACCURATE. YOU'RE GOING TO PUSH THIS. PRESIDENT WILL BACK THIS? >> THE PRESIDENT IS ALREADY BA BAING IT AND TURNING INTO SOMETHING THAT'S BIPARTISAN SUPPORT FOR KING JEFFREY'S BACKING IT AND AGAIN, THE PRESIDENT HAS BEEN MOST TRANSPARENT PRESIDENT IN HISTORY, I THINK WITH CONGRESS' RATINGS AT ALL TIME LOW AND ALL TIME LOW, I THINK THIS IS A NECESSARY FUND AND NO ONE BUYING SINGLE STOCK AND ETFS AND MONEY MARKET FUNDS AND WE MANY A HOLDING PERIOD. LARRY: LET THEM BUY ETFS? >> SURE. ABOVE A CERTAIN SIZE. ABOVE A CERTAIN SIZE. I THINK THERE SHOULD BE HOLDING PERIODS. NOT GOING TO SAY WHO BUT A CONGRESSMAN THAT DID MORE THAN 1300 TRADES TWO YEARS AGO. MY HEDGE FUND IS 1300 TRADES IN A YEAR. LARRY: NO TIME TO DO ANYTHING ELSE. >> GOINGS FOR THE END OF OCTOBER? >> THAT'S ASPIRATIONAL. WE'RE IN A GOOD POSITION. SWITZERLAND IS STILL AROUND AND INDIA HAS BEEN A BIT RE-CAL SAN ANTONIO AND HITTING 200 OR SOMETHING ARE BUSY PAPERING ALL THIS OVER. WE'VE AGREED ON SUBSTANTIAL TERMS AND COUNTRIES AND PRESIDENT SAYING FOR A LONG TIME DOING PEACE DEALS AND TRADE DEALS AND TAX DEALS AND ONE BIG BEAUTIFUL BILL AND GOING FOR THE TREASURY AND LEAD ON THE BIG BEAUTIFUL BILL AND LEAD AT STAFF LEVEL AND TRADING STUFF AND YOU'LL HAVE THE LEAD ON THAT AND YOU'LL BE DONE. YOU'LL BE LOOKING FOR NEW CHALLENGES AND GOING TO BE COMING THE CHAIRMAN OF THE FED. >> CHALLENGES ARE UP AND 1500 PENNSYLVANIA AND NEXT DOOR FOR THAT. >> SUBCEASES OF ALL THIS AND TRADE DEALS AND SUCCESS AND THE TAX DEAL, THAT'S PRESIDENT TRUMP. PRESIDENT TRUMP APPLYING MAXIMUM LEVERAGE AND WE'RE WORKING ON AFFORDABILITY. THERE'S A LOT TO DO ON HOUSING. WE'RE GOING TO BE GIVEN THE STUDENT LOAN PORTFOLIO AND THINK THEY'RE GOING TO WORK ON THAT AND LARGEST SINGLE ASSET FOR THE U.S. GOVERNMENT UP TO $1.7 TRILLION NOW AND THERE'S ALWAYS LENITY TO DO AND CHINA NEGOTIATIONS WILL BE