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CNBC Exclusive: CNBC Transcript: U.S. Commerce Secretary Wilbur Ross Speaks with CNBC’s Andrew Ross Sorkin on “Squawk Box” Today



WHEN: Today, Friday, March 3rd

WHERE: CNBC's "Squawk Box"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with U.S. Secretary of Commerce Wilbur Ross and CNBC's Andrew Ross Sorkin on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Friday, March 3rd, live from Washington, D.C. Following are links to the interview on CNBC.com:http://video.cnbc.com/gallery/?video=3000598133, http://video.cnbc.com/gallery/?video=3000598137 and http://video.cnbc.com/gallery/?video=3000598136.

All references must be sourced to CNBC.

ANDREW ROSS SORKIN: HEY, BECKY. THANK YOU. IT IS A NEW CABINET MEMBER, BUT IT IS NOT SOMEBODY NEW TO "SQUAWK BOX." WE WERE ACTUALLY JUST TALKING ABOUT IT. WILBUR ROSS IS HERE. OF COURSE, A LONG TIME FRIEND OF "SQUAWK BOX." YOU'VE BEEN ON THE SHOW FOR ABOUT 20 YEARS, WE THINK.

WILBUR ROSS: I THINK MAYBE SINCE THE VERY BEGINNING.

SORKIN: SINCE THE VERY, VERY BEGINNING. WE HAVE 100 QUESTIONS FOR YOU. THIS IS OUR FIRST TIME SPENDING TIME WITH YOU IN THIS NEW ROLE.

ROSS: WELL, I HAVE FEWER THAN 100 ANSWERS.

SORKIN: BEFORE WE DO THAT THOUGH, SOME OF THE TAPE THAT BECKY AND JOE WERE JUST ROLLING BEFORE WAS OF THIS RAID OF CATERPILLAR.

ROSS: RIGHT.

SORKIN: AND YOUR DEPARTMENT, THE COMMERCE – THIS VERY DEPARTMENT, WAS INVOLVED IN THAT RAID. HOW DOES THAT WORK? DID YOU APPROVE THAT?

ROSS: WELL, THAT WAS PART OF AN ONGOING INVESTIGATION THAT HAD BEEN BEGUN QUITE A LITTLE WHILE AGO, ANDREW. THE COMMERCE DEPARTMENT HAS ENFORCEMENT RESPONSIBILITIES BOTH ON IMPORTS AND ON EXPORTS. SO IT'S AN IMPORTANT PART OF OUR FUNCTION, AND WE'RE GOING TO BE EVEN STRICTER ON ENFORCEMENT, PARTICULARLY ON INBOUND GOODS THAT SHOULDN'T BE.

SORKIN: BEFORE SOMETHING LIKE THAT HAPPENS, THOUGH, DO THEY CALL YOU? DO THEY CALL THE PRESIDENT?

ROSS: IT'S MORE COMPLICATED THAN THAT, BUT WE DON'T GIVE AWAY HOW PEOPLE CAN BE WARNED IN ADVANCE.

SORKIN: OKAY. WE DO WANT TO TALK ABOUT TRADE. WE WANT TO TALK ABOUT YOUR ROLE HERE IN WASHINGTON. JUST ON YOUR ROLE, GIVEN THAT WE'VE KNOWN YOU FOR AS LONG AS WE HAVE, HOW DOES IT WORK? THERE'S YOU, THERE'S GARY COHN, THERE'S STEVE MNUCHIN, THERE'S PETER NAVARRO. AGAIN, ALL NAMES WE'VE KNOWN FOR MANY YEARS. HOW HAVE YOU – HOW DO YOU DIVVY IT UP, AND HOW INVOLVED DO YOU GET, FOR EXAMPLE, IN SOME OF THE TAX CONVERSATION, HOW INVOLVED DO THEY GET IN THE TRADE CONVERSATION?

ROSS: WELL, THE PRESIDENT HAS ANNOUNCED A VERY BIG FOCUS THAT HE HAS IN MIND FOR ME IS TRADE. AND SO, I TEND TO BE MUCH MORE INVOLVED IN THAT PART. BUT AS YOU KNOW, DURING THE CAMPAIGN, I WROTE EDITORIALS ABOUT OTHER TOPICS AS WELL, INFRASTRUCTURE AND DEREGULATION AND THINGS OF THAT SORT. SO IT'S A COOPERATIVE THING. ONCE EVERY WEEK WE ALL HAVE LUNCH TOGETHER, GARY, MYSELF, STEVE MNUCHIN AND A COUPLE OF THE OTHERS, AND KIND OF MAKE SURE WE'RE ALL ON THE SAME WAVELENGTH.

SORKIN: OKAY, NOW, ON TRADE, YOU HAVE TALKED ABOUT BEING "AGGRESSIVE ON TRADE." DURING THE CAMPAIGN, PRESIDENT TRUMP TALKED ABOUT PERHAPS EVEN A 35% TARIFF. HOW AGGRESSIVE ON TRADE DO YOU PLAN TO BE?

ROSS: WELL, WE'LL BE AGGRESSIVE ON TRADE BECAUSE WE KNOW THAT THE DEALS THAT HAVE BEEN MADE HISTORICALLY HAVE RESULTED IN THE GREAT LOSS OF MANUFACTURING JOBS, GREAT AMOUNT OF CLOSURES OF MANUFACTURING BUSINESSES. WE DON'T WANT THAT TO CONTINUE. SO FIRST EMPHASIS WILL BE ON FACILITATING U.S. EXPORTS TO OTHER COUNTRIES, GETTING RID OF BOTH TARIFF AND NONTARIFF BARRIERS TO TRADE. THE OTHER SIDE OF THAT WILL BE PREVENTING ILLEGALLY SUBSIDIZED GOODS FROM COMING IN AND REALLY ENFORCING IT. ONE OF THE SHOCKS TO ME WHEN I GOT HERE WAS TO LEARN THAT THERE ARE BILLIONS OF DOLLARS OF COUNTERVEILING DUTIES THAT HAVE BEEN IMPOSED BECAUSE WE WON THE CASES, BUT NEVER COLLECTED.

SORKIN: IT IS A FORM OF A TARRIFF, BUT ONE OF THE BIG CONVERSATIONS WE'VE BEEN HAVING OVER THE PAST SEVERAL WEEKS NOW, IF NOT LONGER, IS ABOUT A BORDER ADJUSTMENT TAX.

ROSS: RIGHT.

SORKIN: HOW INVOLVED ARE YOU IN THAT CONVERSATION? DO YOU PUT IT IN THE CONTEXT OF IT BEING A TARIFF?

ROSS: WELL, ANYTHING THAT AFFECTS TRADE WILL BE VIEWED TO SOME DEGREE BY THE FOREIGNERS AS AN ADDED BURDEN. BUT VALUE ADDED TAXES, WHICH IS VERY CLOSE TO WHAT BORDER ADJUSTABLE IS, ARE QUITE COMMON PLACE. WE'RE THE ONLY OECD COUNTRY, WITH ONE EXCEPTION, THAT DOESN'T HAVE V.A.T. VALUE ADDED TAX IS ALWAYS IMPOSED ON IMPORTS AND ALWAYS REBATED ON EXPORTS. OUR COMPANIES ARE NOT PERMITTED, HOWEVER, TO DEDUCT THE FEDERAL INCOME TAX ON THEIR EXPORTS. SO IT'S AN UNFAIR EQUATION.

SORKIN: WHERE DO YOU THINK THE PRESIDENT IS ON THIS ISSUE? I KNOW THERE HAS BEEN A LITTLE BIT OF A WAIT AND SEE. THEY ARE TRYING TO FIGURE OUT HOW TO DO IT. BUT WHERE DO YOU THINK WE LAND?

ROSS: WELL, THE BORDER – WE NEED TO DO SOMETHING TO BALANCE THE BUDGET. BECAUSE IN ORDER TO USE RECONCILIATION, YOU HAVE TO FILL THE HOLES. IT HAS TO BE A BALANCED BUDGET AND GIVEN THE VERY PARTISAN ATMOSPHERE HERE IN WASHINGTON RIGHT NOW, RECONCILIATION IS PROBABLY THE ONLY WAY WE CAN GET THINGS THROUGH, THINGS LIKE TAX RELIEF. SO WE HAVE TO BALANCE IT. BORDER ADJUSTABLE IS CERTAINLY ONE POWERFUL MECHANISM FOR DOING THAT, BUT LET'S SEE WHAT ELSE EVOLVES. LET'S SEE WHAT THE ALTERNATIVES ARE.

SORKIN: WHAT ARE THE ALTERNATIVES? BECAUSE WE HAVEN'T HEARD ABOUT THOSE.

ROSS: WELL, THERE ARE OTHER THINGS THAT YOU COULD CUT LESS. THERE ARE OTHER THINGS YOU COULD DO MORE OF. THE BORDER ADJUSTABLE IS RECKONED, I THINK, BY THE SCORING OF THE CONGRESSIONAL BUDGET OFFICE TO ADD UP TO SOMETHING LIKE A TRILLION DOLLARS OVER TEN YEARS. THAT'S A BIG NUMBER. TEN YEARS IS THE SCORING PERIOD THE CBO USES.

SORKIN: WE'VE ASKED YOU IN THE PAST TO HANDICAP WHAT'S HAPPENED IN THE MARKETS. IF YOU WERE TO HANDICAP WHAT'S GOING TO HAPPEN ON THIS BORDER ADJUSTMENT TAX, WHICH BY THE WAY MIGHT HAVE A BIG IMPACT ON THE MARKETS, YOU WOULD SAY WHAT? YOU THINK IT HAPPENS?

ROSS: I THINK THERE WILL BE SOMETHING FOUND TO FILL THE TRILLION-DOLLAR HOLE, WHETHER IT WILL BE EXACTLY BORDER ADJUSTABLE, AND IF IT IS BORDER ADJUSTABLE, WHETHER IT WILL BE IN EXACTLY THE SAME FORM AND SIZE IS AN OPEN QUESTION.

SORKIN: I WANT TO ASK YOU ABOUT THIS. THIS IS LARRY SUMMERS ON OUR AIR RECENTLY RELATING TO BORDER ADJUSTMENT AND RELATING TO PERHAPS THE APPROACH OF THE ADMINISTRATION ON WHAT HE CALLS HYPER PROTECTIONISM. HE SAYS, "CONSUMERS WILL PAY MORE FOR THEIR GOODS, WHICH MEANS THEY'LL HAVE LESS SPENDING POWER TO SPEND ON AMERICAN GOODS, AND THEY'LL DEFINITELY HAVE CONSEQUENCES FOR THE ECONOMY. OTHER NATIONS WILL RETALIATE, AND THEY'LL HAVE CONSEQUENCES FOR THE HEALTH OF OUR COMPANIES. THE CONSEQUENCES OF PROTECTIONISM ARE THAT WE WILL BE POORER AND THE WORLD WILL BE LESS SAFE." IF YOU WERE ON OUR SET WITH LARRY, YOU WOULD HAVE TOLD HIM WHAT?

ROSS: I WOULD HAVE SAID LOOK AT CHINA. IF TRADE DEFICITS ARE GOOD, THEN HOW CAN TRADE SURPLUSES NOT BE HORRIBLE? THAT'S IN EFFECT WHAT HE'S SAYING. IS THAT YOU'RE BETTER OFF HAVING A TRADE DEFICIT THAN A SURPLUS. BUT YOU LOOK AT CHINA, IT'S BEEN A GREAT ECONOMIC MIRACLE, AND IT'S PERFECTLY OBVIOUS THAT THAT'S LARGELY DRIVEN BY ITS TRADE SURPLUS.

SORKIN: BUT YOU DON'T WORRY ABOUT RETALIATION? YOU DON'T WORRY ABOUT OTHER COUNTRIES? I LOOKED LAST NIGHT. GERMANY HAS SAID THAT THEY WOULD RETALIATE, OTHERS HAVE SAID THEY WOULD RETALIATE. CHINA SAID THEY WOULD RETALIATE. THAT'S NOT SOMETHING WE SHOULD WORRY ABOUT?

ROSS: FIRST OF ALL, I HAVEN'T SAID THAT WE'RE IN ACCORD WITH ANYTHING LIKE A 20% BORDER ADJUSTABLE TAX. THOSE COUNTRIES ARE ALREADY TAKING ADVANTAGE OF THINGS. GERMANY HAS BEEN AN ENORMOUS BENEFICIARY OF THE WEAK EURO. I DON'T CALL THAT CURRENCY MANIPULATION ON THEIR PART BECAUSE THEY'RE JUST PART OF THE EU. BUT THE FACT IS THAT WHAT DRIVES THE GERMAN EXPORT ENGINE IS THE LOW EURO VALUE. SO THE THEORY OF BORDER ADJUSTABLE IS THE CURRENCIES WOULD READJUST AND THEREFORE IT WOULD BE A ZERO-SUM GAME. I'M A LITTLE SKEPTICAL ABOUT THE THEORY THAT THERE'S SOMEHOW A TOTALLY FREE LUNCH AND THAT THE MARKETS WILL EXACTLY ABSORB EVERYTHING. BUT WE DO NEED TO DO SOMETHING TO FILL THAT HOLE.

SORKIN: OUR GOOD FRIEND JOE BACK IN NEW YORK HAS A QUESTION. JOE?

JOE KERNEN: THANKS, ANDREW. WILBUR, YOU TURNED AROUND A LOT OF PRIVATE SECTOR COMPANIES. I MEAN, YOU'VE HAD A LONG, OBVIOUSLY, STORIED CAREER. SO I KNOW YOU HAVEN'T BEEN THERE THAT LONG, CONFIRMED, BUT JUST LOOKING AROUND AND GETTING YOUR BEARINGS, DO YOU HAVE THE IDEA THAT YOU CAN DO IT IN A GOVERNMENT, IN A PUBLIC SECTOR SITUATION? IS IT AS HARD AS YOU THOUGHT IT WOULD BE? I MEAN, DO YOU NEED DEMOCRATS TO HELP YOU? IF NOT, CAN IT ALL BE DONE JUST, YOU KNOW, EITHER THROUGH RECONCILIATION OR THROUGH EXECUTIVE ORDERS?

ROSS: WELL, IN MY OWN CASE, WHILE THERE WAS A LOT OF PARTISAN DELAY IN THE CONFIRMATION, WHEN IT FINALLY CAME, I DID GET 72 VOTES.

KERNEN: I SAW THAT.

ROSS: AND THERE WERE ONLY 27 OPPOSING VOTES. SO THERE ARE SOME THINGS ON WHICH THERE CAN BE BIPARTISAN AGREEMENT. SO I WAS VERY OPTIMISTIC THAT THAT MANY PEOPLE, NAMELY A LOT OF DEMOCRATS, ALSO VOTED FOR ME. I'M VERY PROUD THAT A NUMBER OF THE UNION LEADERS ACTUALLY WROTE LETTERS TO THE CONGRESS RECOMMENDING THAT THEY VOTE FOR ME.

SORKIN: WILBUR, ONE OF THE OTHER QUESTIONS WE WERE TRYING TO UNDERSTAND IS SORT OF WHERE YOU STAND ON THE DOLLAR AND CURRENCY IN PARTICULAR. I WOULD SAY IN PARTICULAR RELATIVE TO WHAT HAS HAPPENED IN MEXICO AS THE PESO HAS FALLEN, WHICH HAS GIVEN INCENTIVE, TO SOME DEGREE, PERHAPS IN THE FUTURE FOR U.S. COMPANIES TO DO BUSINESS THERE.

ROSS: WELL, I THINK THE PESO HAS FALLEN A LOT MAINLY BECAUSE OF THE FEAR OF WHAT WILL HAPPEN WITH NAFTA. I BELIEVE IF WE AND THE MEXICANS MAKE A VERY SENSIBLE TRADE AGREEMENT, THE MEXICAN PESO WILL RECOVER QUITE A LOT.

SORKIN: OKAY. BECKY, I KNOW YOU HAVE A QUESTION BACK IN NEW YORK.

BECKY QUICK: YEAH, WILBUR, I JUST WANTED TO FOLLOW UP ONE MORE TIME WITH THE BORDER ADJUSTMENT TAX. YOU'RE SAYING AND I'M HEARING THAT IT'S NOT NECESSARILY GOING TO GET THROUGH, BUT THAT TRILLION-DOLLAR HOLE WILL GET FILLED ONE WAY OR ANOTHER. WHEN WE TALKED WITH STEVEN MNUCHIN JUST A WEEK OR TWO AGO, HE TOLD US THAT PART OF WHAT MIGHT BE HAPPENING IS IF YOU'RE LOOKING AT YOUR OWN INTERNAL ADMINISTRATION ESTIMATIONS FOR HOW THINGS ARE GOING TO GO WITH DYNAMIC SCORING, IS THAT HOW WE MIGHT POTENTIALLY FILL THAT HOLE AS FAR AS YOU SEE IT TOO?

ROSS: WELL, THERE WILL BE A BUDGET MESSAGE COMING OUT SHORTLY. WE'RE EXPECTING THAT THAT WILL BE A VERY STRINGENT BUDGET. SO THAT COULD BE ONE BEGINNING OF A START. BUT SO MUCH OF THE BUDGET IS WITHOUT ANYBODY'S CONTROL BECAUSE IT'S FOR INTEREST, IT'S MORE MANDATORY ACTIVITIES, AND THE PRESIDENT HAS ANNOUNCED THAT HE WANTS TO INCREASE MILITARY SPENDING BY QUITE A BIT. SO THE BUDGET COULD BE ONE WAY TO DO PART OF IT. I DOUBT YOU CAN FIND A TRILLION DOLLARS OVER THE TEN YEARS STRICTLY THROUGH BUDGET STRINGENCY.

LARRY BOSSIDY: MR. SECRETARY, YOU HAD A LOT OF DISCUSSION WITH RESPECT TO NAFTA. IT IS CONTROVERSIAL. SOME PEOPLE THINK IT'S BEEN REALLY GOOD, OTHER PEOPLE HAVE QUESTIONS ABOUT IT. WHAT ARE THE MOST EGREGIOUS ASPECTS OF THE NAFTA ACCORD, WHICH YOU'RE GOING TO LOOK AT AS A FIRST PRIORITY WHEN YOU TALK WITH THE MEXICANS ABOUT A NEW PACT?

ROSS: SURE. SEVERAL THINGS. FIRST OF ALL, I THINK THE RULES OF ORIGIN WERE FAR TOO LENIENT. RULES OF ORIGIN MEANS HOW MUCH GOODS CAN COME IN FROM COUNTRIES OUTSIDE NAFTA AND YET GET ALL THE BENEFITS OF ABSOLUTION FROM TARIFFS THAT COME WITH NAFTA. I THINK THOSE COULD BE TIGHTENED UP QUITE A BIT. ONE OF THE THINGS THAT TPP DID IS IN SOME WAYS, IT DID TIGHTEN THEM A BIT. SO THERE'S CLEARLY SOME ROOM THERE. A SECOND THING IS THAT THE THEORY OF NAFTA HAD BEEN GRADUAL CONVERGENCE OF LIVING STANDARDS BETWEEN MEXICO AND THE UNITED STATES. THAT REALLY HASN'T HAPPENED ON THE MEXICAN SIDE. THE MINIMUM WAGE FOR THE PESO HAS BARELY GONE UP IN PESO TERMS. AND SINCE THE PESO HAS GONE DOWN SO SEVERELY IN DOLLAR TERMS, MEXICAN WORKERS ARE REALLY NOT AT ALL BETTER OFF THAN THEY HAD BEEN SOME TIME AGO. THE THIRD THING IS THE CURRENCY. I THINK PARTLY THE DECLINE IN THE PESO WAS DUE TO WORRY ABOUT RENEGOTIATION OF NAFTA, BUT I THINK WE ALSO NEED TO THINK ABOUT SOME OTHER MECHANISMS FOR MAKING THE PESO/DOLLAR EXCHANGE RATE A BIT MORE STABLE.

SORKIN: TALKING ABOUT JUST THE TRADE DEFICIT AND SPECIFICALLY MEXICO, I WANT TO READ YOU SOMETHING. THIS IS FROM "THE WALL STREET JOURNAL." MAYBE YOU CAN COMMENT ON THIS REPORT. THE JOURNAL HAD REPORTED LAST WEEKEND THAT TRUMP OFFICIALS HAD ASKED EMPLOYEES OF YOUR DEPARTMENT, THE COMMERCE DEPARTMENT, TO CALCULATE U.S. TRADE FLOWS IN A WAY THAT THEY SAY EXAGGERATES THE OVERALL U.S. TRADE DEFICIT, OVERSTATING DEFICITS WITH COUNTRIES SUCH AS MEXICO, AND WHAT THEY SAID IS EVEN CREATING THE ILLUSION OF DEFICITS WHERE NONE EXIST. WHAT DO YOU KNOW ABOUT THIS?

ROSS: WELL, I THINK THAT ARTICLE IS A GREAT EXAGGERATION OF WHAT WAS GOING ON. THERE HAS BEEN FOR MANY YEARS A TECHNICAL DEBATE ABOUT HOW YOU MEASURE INDIVIDUAL COUNTRY TRADE BALANCES. WHAT THE DEBATE REVOLVES AROUND IS HOW DO YOU TREAT RE-EXPORTS, ITEMS THAT WERE IMPORTED –

SORKIN: COME IN AND GO OUT AGAIN.

ROSS: AND THEN THEY GO BACK OUT. DO YOU COUNT THOSE AS GOING BACK TO THE ORIGINAL POINT FROM WHICH THEY CAME AND JUST COUNT THEM THE ONE TIME? DO YOU COUNT THEM ON THE WAY IN AND ON THE WAY OUT? AT THE END OF THE DAY, IT DOESN'T CHANGE YOUR OVERALL TRADE BALANCE, BUT IT DOES CHANGE POTENTIALLY WHICH COUNTRIES ARE THE CAUSE OF THE TRADE DEFICIT. SO IT'S A HIGHLY TECHNICAL ISSUE. MY GUESS IS IT'LL GO ON AND ON AND ON OVER THE YEARS, LIKE MANY, MANY TECHNICAL ISSUES DO.

SORKIN: OKAY. JOSEPH?

KERNEN: YEAH WILBUR, THERE'S TAX REFORM AND THEN THERE'S DEREGULATION. I KNOW YOU REMEMBER IN THE REAGAN ADMINISTRATION THERE WAS ACTUALLY A DEREGULATION CZAR. I THINK THAT MAYBE THAT COULD BE PARTIALLY YOUR ROLE. AT THIS POINT, DO YOU NEED TO INTRODUCE ANYTHING TO GET STARTED? I MEAN, I KNOW WE'VE ALREADY GOTTEN STARTED – WHERE ARE WE IN THAT PROCESS? HOW MUCH MORE IS THERE TO DO, WHICH, FOR DEREGULATION, AND WHAT'S YOUR ESTIMATE OF HOW MUCH THAT COULD ADD TO GDP JUST ALONE? JUST DEREGULATION ALONE, WHAT COULD YOU ADD TO GDP, DO YOU THINK?

ROSS: WELL, AS TO DEREGULATION, THE PRESIDENT HAS TASKED THE COMMERCE DEPARTMENT WITH MAKING A SURVEY OF ALL OF THE MANUFACTURING BUSINESSES IN THIS COUNTRY, ASKING THEM WHAT PERMITTING PROBLEMS THEY HAVE, WHAT REGULATORY PROBLEMS THEY HAVE, WHAT PROBLEMS WITH RULES THEY HAVE. IN FACT, I BELIEVE TODAY IS THE DAY THAT THE REQUEST THAT WE'RE SENDING OUT ON A VERY BROAD BASE WILL BE PUBLISHED IN THE FEDERAL REGISTER.

KERNEN: RIGHT, RIGHT.

ROSS: AND WE'RE GOING TO BE ENLISTING THE SUPPORT OF THE NATIONAL ASSOCIATION OF MANUFACTURERS, BUSINESS ROUND TABLE, CHAMBER OF COMMERCE, THE NATIONAL FEDERATION OF SMALL BUSINESSES, EVERYBODY, TO TRY TO GET THE INPUTS, WHAT ARE THE REGULATIONS THAT ARE HOLDING BACK MANUFACTURING. I BELIEVE THAT WE WILL FIND THAT IT IS WAY INTO THE TENS OF BILLIONS OF DOLLARS AND VERY POSSIBLY APPROACHING A HUNDRED ODD BILLIONS OF DOLLARS THAT WE CAN DEAL WITH. MANY OF THESE WERE PUT IN BY EXECUTIVE ORDERS AND BY AGENCY RULES, AND THOSE WOULDN'T REQUIRE ACTS OF CONGRESS. SO WE ARE UP TO OUR EYEBALLS IN TRYING TO MAKE SURE WE IDENTIFY ALL THE PROBLEMS BECAUSE WHERE THE PROBLEMS COME IN, IT'S NOT JUST THE COST OF THE REGULATION, IT'S ALSO THE DELAYS. THE DELAYS IN GETTING PROJECTS GOING AND THE INTERFERENCE WITH BUSINESSES OPERATING AS THEY SEE BEST. SO IT'S A LOT TO DO THERE. I THINK THAT WILL BE ONE OF THE MOST FRUITFUL AREAS THAT THE ADMINISTRATION CAN ATTACK QUICKLY.

KERNEN: SO WE'LL SEE THAT NEWS TODAY THEN, WILBUR, YOU JUST SAID THAT – ABOUT THE FEDERAL REGISTER? THAT'LL BE TODAY?

ROSS: YES, WE THINK IT'LL BE PUBLISHED TODAY.

KERNEN: SORRY, ANDREW.

ROSS: FEDERAL REGISTER IS NOT PART OF COMMERCE, SO I CAN'T EXACTLY CONTROL THAT. BUT WE BELIEVE IT'LL BE IN TODAY.

SORKIN: JUST TALKING ABOUT MANUFACTURING IN AMERICA, ESPECIALLY BIG COMPANIES IN AMERICA WANT TO KNOW YOUR POSITION THESE DAYS ON THE EXPORT-IMPORT BANK. IT'S BEEN A CONTROVERSIAL ONE. IT IS SOMETHING THAT SOME PEOPLE HAVE DESCRIBED AS CENTRAL TO HELPING OUR COMPANIES. OTHER PEOPLE HAVE CALLED IT CRONY CAPITALISM.

ROSS: WELL, I THINK WE NEED SOME FORM OF HELPING FINANCE EXPORTS TO BE COMPETITIVE. YOU LOOK AT THIS ASIAN INFRASTRUCTURE INVESTMENT BANK THAT THE CHINESE HAVE SET UP. THAT HAS PUT OUT A HUGE AMOUNT OF COMMITMENTS ALREADY IN THE LITTLE TIME THAT IT HAS BEEN OUT. FINANCE IS CLEARLY ONE OF THE MECHANISMS FOR INTERNATIONAL COMPETITION. SO MAYBE THERE ARE SOME THINGS AT EX-IM THAT COULD BE FIXED. MAYBE A DIFFERENT MECHANISM IS NEEDED. BUT WE NEED SOMETHING TO DEAL WITH THAT. WHAT I HOPE, WHATEVER COMES OUT OF IT, WILL DO IS TO HELP SMALL BUSINESSES MORE. ONLY SOMETHING LIKE 3% OF AMERICAN BUSINESSES EXPORT ANYTHING. AND FOR THE LITTLE COMPANY TO ORGANIZE THE LETTERS OF CREDIT THAT ARE SO CENTRAL TO INTERNATIONAL TRADE IS HARD. SO I THINK THERE'S A REAL ROLE FOR SOMEBODY PROVIDING LETTERS OF CREDIT AND THE OTHER SORTS OF FINANCIAL SUPPORT, PARTICULARLY TO HELP THE SMALLER COMPANIES GET GOING.

SORKIN: WHAT'S THE TIMELINE ON RESOLVING THIS ONE WAY OR THE OTHER?

ROSS: WELL, EX-IM, AS I UNDERSTAND IT, HAS BEEN REAUTHORIZED, BUT IT DOESN'T HAVE – THERE ARE VACANCIES ON THE BOARD. AND CONSEQUENTALLY, THEY ARE ONLY ABLE TO MAKE LOANS UNDER $10 MILLION AT THIS POINT.

SORKIN: RIGHT. THE FUTURE OF THE WTO AND OUR ROLE IN IT, WHAT DO YOU THINK IS GOING TO HAPPEN?

ROSS: WELL, WTO IS IN SOME WAYS VERY NECESSARY. YOU PROBABLY DO NEED AN ARBITER OF SOME SORT IF YOU ARE GOING TO HAVE INTERNATIONAL TRADE. QUESTIONS ABOUT THE SPECIFICS OF HOW WTO FUNCTIONS, IS IT A FAIR SETUP, THE DISPUTE RESOLUTION MECHANISM ESPECIALLY FROM THE POINT OF VIEW OF THE U.S. THERE'S SOME FINE TUNING AT LEAST THAT I THINK THAT SHOULD BE NEEDED AT THE WTO. AND AS THINGS GO ON, AND WE GET A LITTLE MORE EXPERIENCE WITH THEM, AND THEY GET A LITTLE MORE EXPERIENCE WITH US, WE'LL SEE HOW THAT SITUATION EVOLVES.

SORKIN: WHAT KIND OF CONVERSATIONS, EITHER BACK CHANNEL OR OTHERWISE, HAVE YOU HAD WITH THE CHINESE, YET, ABOUT TRADE?

ROSS: NONE.

SORKIN: NONE.

ROSS: NO.

SORKIN: WHEN DO YOU PLAN TO TALK TO THEM?

ROSS: WELL, AS YOU KNOW, THE FIRST ON OUR AGENDA IS NAFTA BECAUSE WE THINK IT MAKES SENSE TO SOLIDIFY YOUR OWN NEIGHBORHOOD FIRST. SO THAT WILL BE THE FIRST WE WILL UNDERTAKE. THE TRADE PROMOTION AUTHORITY OF THE SO-CALLED FAST TRACK IS A PROCESS THAT WAS ALREADY STARTING ITSELF THROUGH IN TERMS OF NAFTA AND POTENTIALLY OTHERS. SO WE'RE FIRST GOING TO DO NAFTA.

SORKIN: DO YOU WORRY ON CHINA, THOUGH, THAT THE CHINESE WILL EFFECTIVELY HOLD SOME OF OUR U.S. COMPANIES? IT'S BEEN DESCRIBED AS HOLDING THEM HOSTAGE. WHETHER IT BE THE GMs OF THE WORLD OR THE APPLES OF THE WORLD OR THE BOEINGS OF THE WORLD.

ROSS: I THINK YOU CAN ASSUME THAT WHATEVER OVERT ACTIONS WE TAKE, THERE WILL BE SOME SORT OF A COUNTERPUNCH COMING FROM WHOEVER IS THE OTHER PARTY. BUT EXPORTS FROM CHINA TO THE U.S. ARE MUCH MORE IMPORTANT TO THE CHINESE ECONOMY THAN ARE CHINESE EXPORTS TO OUR ECONOMY. SO I THINK THAT THERE'S A PROPORTIONALITY ISSUE. ALSO, THE THINGS THEY EXPORT TO US ARE NOT THE SAME AS THE THINGS WE EXPORT TO THEM. SO IT'S A MUCH MORE COMPLICATED ISSUE THAN JUST ONE ON ONE, TIT FOR TAT.

SORKIN: JOSEPH?

KERNEN: OH, NO, I THINK THAT MAYBE WE'RE OUT OF TIME. I WAS GOING TO TELL WILBUR HOW MUCH I LIKED THOSE SHOES HE WORE TO THE SPEECH.

SORKIN: THAT WAS GOING TO BE MY LAST QUESTION.

KERNEN: OH, NO. I'M SORRY. YOU KNOW WHAT, GREAT MINDS. ANOTHER EXAMPLE OF GREAT MINDS, ANDREW, THAT THINK ALIKE. I'M SURPRISED. WHERE DO YOU GET THOSE, WILBUR? WHENEVER I HAVE HARD BUSINESS SHOES ON, I FEEL LIKE I'M GOING TO CHURCH. YOUR WHOLE FEELING CAN CHANGE WHEN YOU GOT COMFORTABLE SHOES ON. YOU DON'T FEEL DRESSED UP. WHERE CAN I GET THOSE?

ROSS: STUBBS & WOOTEN.

SORKIN: THAT'S IN FLORIDA, RIGHT?

ROSS: YEAH, THEY'RE IN FLORIDA AND NEW YORK. IT'S ACTUALLY A VERY INTERESTING AMERICAN SUCCESS STORY.

KERNEN: THERE YOU GO.

ROSS: PERCY STEINHARD IS THE OWNER. HE'S A CUBAN-AMERICAN WHO FLED BECAUSE OF THE CASTRO TAKEOVER. HE'S BUILT THIS VERY SUCCESSFUL HIGH-END BUSINESS.

SORKIN: OKAY. I HAVE TWO MORE FOR YOU. WE'RE NOT GOING TO DO SLIPPERS TO END THIS. WE'VE ALWAYS TALKED TO YOU ABOUT MARKETS. YOU'VE OFTEN PROGNOSTICATED ABOUT THE MARKETS. HISTORICALLY, PRESIDENTS HAVE NOT SPOKEN ABOUT THE MARKETS ONE WAY OR THE OTHER AS AN INDICATOR OF THEIR OWN PERFORMANCE IN PART BECAUSE THERE IS A VIEW THAT YOU LIVE BY. IF YOU USE THAT APPROACH, YOU MIGHT LIVE BY THE MARKETS WHEN THEY ARE GOING UP AND DIE BY THE MARKETS AS THEY'RE GOING DOWN. WHAT DO YOU THINK OF WHAT THE PRESIDENT HAS SAID ABOUT THE MARKETS AND WHAT DO YOU THINK ABOUT THE

ROSS: I THINK THE MARKETS HAVE GIVEN A PRETTY CLEAR ENDORSEMENT OF OPTIMISM COMING FROM THE NEW ADMINISTRATION. I DON'T THINK THERE'S ANY DOUBT ABOUT THAT WHATSOEVER. IN FACT, ELECTION NIGHT WE WERE WITH CARL ICAHN AND SOME OTHERS AT ABOUT 2:00 IN THE MORNING WHEN THE FUTURES MARKET HAD COLLAPSED. CARL LEFT THE PARTY AND STARTED BUYING. SO HE WAS SMARTER THAN I WAS. I STAYED AT THE PARTY. HE WENT AND BOUGHT AND MADE A BILLION DOLLARS.

SORKIN: BECKY?

QUICK: HE MADE A BILLION DOLLARS?

SORKIN: YES, IN ONE NIGHT.

QUICK: THAT'S CRAZY. WILBUR, ONE MORE QUESTION. YOU WERE JUST TALKING ABOUT WATCHING THE MARKETS. AS YOU'VE BEEN TALKING THIS MORNING, THE PESO HAS COME UNDER SOME PRESSURE. THE DOLLAR WAS UP AGAINST THE – PESO YEAH – THE DOLLAR WAS UP AGAINST THE PESO BEFORE. NOW IT'S 0.5% LOWER. THERE WAS A BIG SWING RIGHT AFTER YOUR PESO COMMENTS. AND I WAS JUST THINKING THROUGH WHEN YOU WERE TALKING ABOUT NAFTA AND YOU TALKED ABOUT THE CURRENCY AND THE DECLINE IN THE PESO, HOW WOULD YOU ACTUALLY – WHAT KIND OF MECHANISM WOULD IT BE TO THE MAKE THE DOLLAR/PESO MORE STABLE? WHAT WOULD THAT LOOK LIKE?

ROSS: WELL, AT THE END OF THE DAY, CURRENCY IS MUCH MORE IN THE PROVINCE OF THE DEPARTMENT OF TREASURY AND THE FEDERAL RESERVE BANK THAN IT IS OF COMMERCE. BUT THINK BACK TO WHEN THERE WAS THE BIG MEXICAN CRISIS. BOB RUEBEN WAS THEN THE TREASURY SECRETARY. HE PUT IN PLACE SOME LINES OF CREDIT RUNNING BACK AND FORTH IN BETWEEN THE CENTRAL BANKS TO GIVE THEM THE MECHANISM FOR DEALING WITH IT. SO THERE ARE MECHANISMS, WHETHER IT'S THAT ONE OR SOMETHING ELSE, THAT COULD BE USED AS PART OF AN OVERALL PACKAGE TO TRY TO STABILIZE THINGS. THERE ARE LOTS OF PROBLEMS WITH THE WEAK PESO FOR MEXICO. WE TALKED ABOUT THE WAY IT HELPS IN TERMS OF THEIR MANUFACTURING COMPETITIVENESS. BUT MEXICO IMPORTS AN AWFUL LOT OF ITS FOOD. IN FACT, I BELIEVE THEY'RE THE BIGGEST IMPORTER OF CORN FROM THE UNITED STATES. SO A WEAK PESO HURTS THE AVERAGE MEXICAN AND CERTAINLY HURTS THE POOR MEXICAN TO A VERY, VERY SUBSTANTIAL DEGREE BECAUSE MOST FOOD PRODUCTS ARE ULTIMATELY DOLLAR DENOMINATED.

SORKIN: GOT TO ASK TWO MORE QUESTIONS BEFORE WE GO. ONE IS THE ISSUES OF RUSSIA HAVE DOMINATED THE HEADLINES RECENTLY WITH THIS ADMINISTRATION. I'M JUST CURIOUS, AS SOMEONE WHO'S PART OF THIS ADMINISTRATION, HOW MUCH OF THAT DOMINATES YOUR OWN CONVERSATION AND HOW WORRIED YOU ARE TO THE EXTENT YOU ARE THAT IT SIDE TRACKS SOME OF THESE OTHER POLICY PROJECTS, WHICH THE MARKETS AND SO MANY OF OUR AUDIENCE ARE FOCUSED ON IN TERMS OF WHERE THE ECONOMY GOES.

ROSS: WELL, I DON'T THINK IT HAS VERY MUCH IMPACT ON THE ECONOMY AT ALL. IT CERTAINLY HAS NOT BEEN A BIG THING IN TERMS OF THE ACTIVITIES OF COMMERCE. WE'RE TRYING TO BUILD UP DOMESTIC MANUFACTURING. WE'RE TRYING TO HELP WITH DEREGULATION. WE'RE TRYING TO HELP WITH PROMOTING EXPORTS. WE'RE TRYING TO DO A LOT WITH ENFORCEMENT. IN THE NEXT WEEK OR SO, YOU'RE GOING TO START TO SEE A LOT MORE OUT OF US ON ENFORCEMENT. I THINK IT'S RIDICULOUS TO GO TO ALL THE TROUBLE TO BRING A TRADE CASE, WIN IT, AND THEN NOT ENFORCE IT AGAINST THE OTHER PARTY. WE WILL BE A VERY STRONG ENFORCER OF IT.

SORKIN: OKAY. WE'RE GOING TO LET YOU GO. I SEE YOU'RE TWEETING NOW. I JUST SAW YOUR SECOND TWEET WENT OUT RECENTLY.

ROSS: SECOND TWEET. IT WAS A DEFENSIVE TWEET BECAUSE PEOPLE BETWEEN THE CAMPAIGN AND NOW HAD OPENED FAKE FACEBOOK ACCOUNTS IN MY NAME, FAKE THIS ACCOUNT, FAKE THAT. SO WE FELT THE ONLY WAY TO DEAL WITH THAT WAS TO SET THEM UP FOR ME. BUT I DO NOT INTEND TO BE A SERIAL TWEETER.

SORKIN: SO THE PRESIDENT HAS NOT RUBBED OFF ON YOU ON THIS SCORE?

ROSS: WELL, THE MESSAGE IN HIS TWEETS RUBS OFF, FOR SURE, BUT NOT THE BEHAVIOR. I'M AFRAID OTHERWISE PEOPLE WILL THINK I'M PUTTING THOSE SLIPPERS AS FOOT IN THE MOUTH.

SORKIN: WILBUR ROSS, IT IS A PLEASURE AND PRIVILEGE. WE APPRECIATE YOUR TIME THIS MORNING. GREAT TO HAVE YOU ON IN THIS NEW CAPACITY.

ROSS: THANK YOU, ANDREW. JOE, BECKY, GOOD TO TALK WITH YOU.

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