WHEN: Today, Thursday, April 20th
WHERE: CNBC's "Fast Money Halftime Report"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with CNBC's Chief International Correspondent Michelle Caruso-Cabrera and German Finance Minister Wolfgang Schauble live from Washington, D.C., today, Thursday, April 20th on CNBC's "Fast Money Halftime Report" (M-F, 12PM-1PM ET). Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000611753.
BRIAN SULLIVAN: ANOTHER BIG INTERVIEW NOW ON THE "HALFTIME REPORT." MICHELLE CARUSO-CABRERA LIVE IN WASHINGTON, DC WITH A VERY EXCLUSIVE AND RARE INTERVIEW WITH THE GERMAN FINANCE MINISTER, WOLFGANG SCHAUBLE. MICHELLE.
MICHELLE CARUSO-CABRERA: THANKS SO MUCH, BRIAN. YES, WE'RE SITTING HERE. GREAT TO HAVE YOU HERE, SIR. THANKS SO MUCH. A LOT HAS BEEN SAID BY THE NEW ADMINISTRATION ABOUT GERMANY, A LOT OF TOUGH WORDS. PRESIDENT TRUMP HAS TALKED ABOUT AN IMPORT TARIFF ON CARS FROM GERMANY. PETER NAVARRO, ONE OF HIS LEAD ADVISERS ON TRADE, HAS SAID THAT GERMANY IS STICKING IT TO THE UNITED STATES IN THE WAY YOU STRUCTURE YOUR ECONOMY. ARE YOU?
WOLFGANG SCHAUBLE: NO, I DON'T AGREE. BUT WE WILL TRY TO ANSWER ANY QUESTION. WE WILL TRY TO EXPLAIN WHAT WE ARE DOING. WE WILL TRY TO EXPLAIN THAT THE GERMAN SURPLUS IS BY NO WAY MANIPULATED IN ANY WAY. OF COURSE WE HAVE THE EXCHANGE RATE OF THE EURO IS RELATED – REGARDING TO THE STRENGTH OF THE GERMAN ECONOMY, IT WOULD BE A LITTLE BIT LOW. BUT WE HAVE A COMMON MONITOR UNION AND THE MONITOR POLICIES DECIDED BY THE ECB AND THE ECB HAS MONETARY POLICY NOT ONLY FOR GERMAN ECONOMY BUT FOR – ECONOMIES WITH DIFFERENT LEVEL COMPETITIVENESS. THERE IS NO REASON, BUT WE ARE OPEN TO LISTEN, TO DISCUSS, TO EXPLAIN AND WE ARE INTERESTED IN THE BEST RELATIONS POSSIBLE.
CARUSO-CABRERA: THEY ARGUE YOU COULD DO MORE. YOU COULD LOWER YOUR VAT TAX, YOU COULD ALLOW WAGES TO RISE MORE AND THAT WOULD HELP WITH THE TRADE BALANCE, WITH THE CURRENT ACCOUNT SURPLUS BECAUSE YOU CAN'T CONTROL MONETARY POLICY.
SCHAUBLE: YES, OF COURSE. BUT I CAN TELL YOU, IF YOU WANT TO GIVE ADVICE TO GERMAN ECONOMIC OR FISCAL POLICY, YOU HAVE TO KNOW SOME FACTS. FOR EXAMPLE, THE WAGES HAVE RISEN MUCH MORE THAN THE NATIONAL GROSS PRODUCT, BY FAR. THE PENSIONS HAVE RAISED MUCH MORE. THE INVESTMENTS IN THE FEDERAL BUDGET. WE'RE ONLY RESPONSIBLE FOR THE FEDERAL BUDGET. WE HAVE STATE BUDGETS ON BEHALF OF OUR – AS EXPENSES OF INVESTMENTS IN THE FEDERAL BUDGET HAVE RISED BY 35%. THEREFORE, WE HAVE THE HIGHEST RATE OF INVESTMENT IN RESEARCH AND DEVELOPMENT OF ALL EUROPEAN COUNTRIES AND BY FAR MUCH HIGHER THAN THE U.S. IN RELATION TO THE NATIONAL GROSS PRODUCT. THEREFORE, I AM READY TO DISCUSS EVERY FACT BUT YOU CAN ONLY GIVE ADVICE ON THE BASIS OF THE FACTS. I KNOW AS GERMAN FINANCE MINISTER, I KNOW THE FACTS.
CARUSO-CABRERA: BIG FRUSTRATION OF THE PRESIDENT IS NATO SPENDING BY EUROPEAN COUNTRIES. THE U.S. IS VERY COMMITTED TO LEVELS OF DEFENSE SPENDING, AS REQUIRED BY NATO. NATO REQUIRES, ONE OF THE OBLIGATIONS IS TO SPEND THE EQUIVILENT OF 2% OF YOUR GDP ON YOUR DEFENSE. GERMANY HASN'T DONE THAT FOR DECADES, IF EVER. WHY NOT?
SCHAUBLE: FOR DECADES IS A LITTLE BIT LONG BECAUSE WE HAVE VERY SPECIFIC SITUATIONS. WE HAVE BEEN A DIVIDED COUNTRY AFTER WORLD WAR II AND SO ON. BUT HAVING SAID THIS, THE LEADERS, THE HEADS OF STATES AND GOVERNMENT OF NATO HAVE TAKEN A COMMON POSITION AT THE NATO SUMMIT AND I THINK IT WAS IN 2014 OR SO TO MOVE IN TEN YEARS INTO THE DIRECTION OF SPENDING – OUR DEFENSE IN THE DIRECTION OF 2% GDP. THE GERMAN DEFENSE BUDGET IS MOVING SINCE 2016. WE STARTED ALREADY IN 2016 TO INCREASE OUR DEFENSE BUDGET. WE DO IT MUCH MORE THIS YEAR AND WE CONTINUE TO DO SO. WE HAVE SOME POLITICAL DEBATE IN GERMANY. WE WILL HAVE A DISCUSSION BUT THE POSITION OF THE CHANCELLOR AND THE POSITION OF HER PARTY, WHICH I AM PART OF THIS, IS CLEARLY WE HAVE TO INCREASE OUR DEFENSE SPENDING CONTINUOUSLY.
CARUSO-CABRERA: ARE YOU DOING THAT BECAUSE OF PRESIDENT TRUMP, BECAUSE OF WHAT HE SAID?
SCHAUBLE: NO, HE'S RIGHT. HE SAID THINGS WHICH ARE RIGHT AND SO WE ARE DOING BECAUSE HE SAID IT AND BECAUSE HE IS RIGHT. I REMEMBER THAT EVEN PRESIDENT KENNEDY WAS ALSO ASKED FOR A FAIR BURDEN SHARING BETWEEN EUROPE AND UNITED STATES IN THE BURDEN OF THE TRANSATLANTIC ALLIANCE. HE WAS ALSO RIGHT AND NOW WE WILL DELIVER. IT IS QUITE CLEAR THAT PRESIDENT TRUMP IS RIGHT.
CARUSO-CABRERA: FINAL QUESTION FOR THE LIVE PART OF THIS INTERVIEW. PRESIDENT TRUMP CANDIDATE, NOW PRESIDENT TRUMP IN OFFICE. WHAT'S YOUR ASSESSMENT OF HIS LEADERSHIP THUS FAR BASED ON WHAT YOU MIGHT HAVE EXPECTED WHEN HE WAS RUNNING?
SCHAUBLE: I THINK WHEN HE WAS RUNNING, AS A MEMBER OF GOVERNMENT WE RESTRICTED OURSELVES TO TRY TO INTERFERE IN THE CAMPAIGN OF AMERICA. IT IS THE DECISION OF THE AMERICAN CITIZENS. SINCE HE HAS BEEN ELECTED AS PRESIDENT, HE IS THE PRESIDENT OF THE UNITED STATES AND HE IS RESPECTED. WE HAVE CLOSE COOPERATION. HE IS IN VERY TENSE COMMUNICATION WITH CHANCELLOR MERKEL. SHE IS THANKFUL FOR THIS. SHE HAD LONG DISCUSSIONS WHEN HE CAME TO WASHINGTON. THEY HAVE OFTEN CONNECTION IN CALLS, TELEPHONE CALLS.
CARUSO-CABRERA: WAS THAT A GOOD MEETING? BECAUSE SOME REPORTS SUGGESTED IT WASN'T A GOOD MEETING.
SCHAUBLE: SHE TOLD US IT HAS BEEN A GOOD MEETING. LOOK, SOME PEOPLE IN THE MEDIA ARE LOOKING AT A STRANGE SITUATION, SHAKE HANDS OR SHAKE HANDS OR NOT AND THAT WAS TOTALLY WRONG. IT WAS A VERY – IT WAS A MEETING OF MUTUAL CONFIDENCE AND SHE WAS VERY PLEASED. OF COURSE WE HAVE DIFFERENT POSITIONS. AMERICAN ADMINISTRATION IS SAYING WE WILL EXAMINE ALL THESE THINGS. I TOOK VERY SERIOUS THE INTERVIEW WHICH I GIVE MY COLLEAGUES, THE SECRETARY OF TREASURY, STEVE MNUCHIN IN THE FT SOME DAYS AGO IN SAYING WE WILL NEED TO SOMETIMES TO TAKE OUR DECISIONS. WE ARE DISCUSSING, HE TAKES OUR ARGUMENT SERIOUS. AND WHEN THEY TAKE DECISION, WE WILL CONTINUE TO DISCUSS.
CARUSO-CABRERA: THANK YOU SO MUCH FOR DOING THIS. WE REALLY APPRECIATE IT. GUYS, THIS IS THE LIVE PORTION OF THE INTERVIEW. THERE'S GOING TO BE A LOT MORE IN "POWER LUNCH" WHERE WE TALK ABOUT HIS THOUGHTS ON THE FRENCH ELECTION AND THE FUTURE OF THE EURO, CAN IT SURVIVE. BACK TO YOU.
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