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CNBC TRANSCRIPT: TOM DONOHUE, CEO OF THE U.S. CHAMBER OF COMMERCE ON “THE KUDLOW REPORT” TONIGHT

WHEN: TONIGHT, WEDNESDAY, OCTOBER 12TH AT 7PM ET

WHERE: CNBC's “THE KUDLOW REPORT

Following is the unofficial transcript of a CNBC interview with Tom Donohue, CEO of the U.S. Chamber of Commerce, tonight on CNBC’s “The Kudlow Report” at 7PM ET. All references must be sourced to CNBC.

LARRY KUDLOW, host: We welcome back to the show Tom Donohue, who is the CEO of the US Chamber of Commerce.

Tom, welcome back. Let me go right to it. A big trade bill is likely to pass the House and Senate, the FTA, free trade bill, Colombia, South Korea, Panama; I know you're for it, but let me ask you what the critics say is it's going to open the door to exporting more jobs overseas, hurt our unemployment rate. You know people are cranky about unemployment; what is your defense of the FTA?

Mr. TOM DONOHUE: It's very simple. We have currently obstructions to selling into these countries. They don't have obstructions into selling ours. We're taking away the obstructions. We have another reason we have to do it. The EU made a deal with Korea, Canada made a deal with Colombia, and we’ve already lost a billion dollars worth of wheat sales to Colombia. We take away the obstructions, we compete to keep the jobs we have, we should over a period of time be able to create a quarter of a million more jobs in trade to those three countries. The people that are complaining about this don't really get it.

KUDLOW: Well, on the don't really get it part, OK, look, I regard myself as a free trader, but--but, but, but--people say American companies will invest more, let's take Panama or Colombia or South Korea, any of the three, they'll invest more, they'll locate facilities there, and they'll cut back on their US workforce and hire the local workers at lower wages. Your response.

Mr. DONOHUE: They can already do that. The advantage of the agreement is we take away the tariffs when we want to build something or grow something here and sell it there. If we just want to go there and set up shop, we can do that today without the free trade agreements. This is the right thing for American jobs and it's about time. We've been fooling around with it for six years. It's going to make a positive difference for our country. If we didn't do it, we will lose 300,000- 400,000 jobs over the next few years and that's not a very smart idea.

KUDLOW: All right. Related matter but slightly different, the US Senate has become a China basher. They're going to put this bill up which is going to--you know, no currency manipulation, and we're going to have tariffs in the US. Is the Chamber, are you a China basher? Are you joining the heat? We heard Mitt Romney last night bash China some and the other candidates. What's your take on this China story?

Mr. DONOHUE: Well, a lot of people think they make good political hay by bashing China. I don't think it's a very good idea. First of all, there is no question that the currency deal is a little bit out of balance. China has been gradually moving up the currency price so that it's getting closer to market, got a long way to go. But the bottom line is what China's fundamental objective is to keep hundreds and hundreds of thousands of people working, and if they--if we force new tariffs on them, they'll just drop the price of goods. What we need to do is have an evolutionary improvement in China's currency as circumstance, not a revolutionary one, and I think what the Congress is doing is getting set so everybody can attack China somewhat before the election. It might be good politics, it's terrible economics.

KUDLOW: All right. Let me go to politics and economics here in Washington, or there, in Washington, DC. President Obama has turned out to be a left-wing populist, bashing millionaires, taxing millionaires, bashing banks, bashing bank profits. I want to ask you about this left-wing populism. What are your members saying about it, what is its impact on the economy, what's your own reaction to this Obama shift?

Mr. DONOHUE: Well, first of all, Larry, I want it to be very clear to all of your viewers and anybody from the media that's watching this show is that you said all of that. Now let me get to the reality.

KUDLOW: Do you disagree that he is mostly left wing?

Mr. DONOHUE: Not at all.

KUDLOW: I mean, all the rhetoric about taxing millionaires...

Mr. DONOHUE: I--no. No, that wasn't my point. It was so...

KUDLOW: ...that banks can't make a profit? Do you disagree with that? I'm just quoting him.

Mr. DONOHUE: Of course not. Of course not. But I just want, with all that enthusiasm, you opened the idea. Here's my point. The president is obviously working on his re-election, we understand that. Everybody knows we need more jobs in this country. My view where--and there's some things he's doing we can support, but my view is the great amount of jobs in this country for real economic growth and real long-term improvement in the economy has got to be done in the private sector.

We put out a six-part plan; do the trade agreements, and we're going to do them today; number two, we now have more oil, gas and coal than anyone in the world and we need to begin to drill it and sell it and get off having to buy it from places we don't want around the world. It'll create millions of jobs, give a lot of money into the government in royalties and in taxes. We need to be a better place for people to come visit. We need to get the tourists back here, let's welcome them back. We need to do infrastructure. There's a place we can work with the president. We need to get rid of regulations that don't make sense now and permits that take years and years before you can even start to build anything and hire people. There are lots of others, but the bottom line is this: All we--I mean, that doesn't take any extra money, all we have to do is go out and take care of the advantages we now have and create jobs and we need the president's help on that.

KUDLOW: All right. US Chamber of Commerce head Tom Donohue. We appreciate your time, sir. It's great to see you again.

Mr. DONOHUE: Yeah, it's good to see you. See you soon.

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