Following is the transcript of a CNBC interview with United States Secretary of Commerce, Wilbur Ross. The interview was broadcast on CNBC on 6 November 2017.
All references must be sourced to CNBC.
Interviewed by Geoff Cutmore, Anchor, CNBC.
Geoff Cutmore: Wilfred, thank you very much for that. Mr. Secretary, thank you so much for giving CNBC this time.
Wilbur Ross: Glad to be on.
GC: let me start off straight away by asking you to deal with these allegations that you concealed your position in navigator from the U.S. committee that had to ratify you as commerce secretary.
WR: Right well, that's totally wrong. It was disclosed on the form 278, which is the financial disclosure form in my case three times, 10.14.1.3, 10.15.1.3 and 24.1.4.2 as well as on the public website of the office of government ethics, namely oge.gov so it's totally incorrect.
GC: So when Senator Blumenthal says you misled the committee by not revealing navigator's relationship with the Russian company Sibur, you completely reject that allegation?
WR: Well, that's a different question. My obligation is to disclose companies in which I'm an officer, a director or an investor. I am neither an officer, nor a director nor an investor in Sibur. Fact, I've never met them, don't know the people, have nothing to do with the negotiation of the charter arrangement. The only commercial arrangement between navigator and Sibur is a charter arrangement. That charter arrangement was made when Sibur was not under sanctions and, frankly, Sibur is not under sanctions to this very day. So, in fact, there's nothing wrong with navigator having a commercial relationship with Sibur.
GC: Are you concerned, Mr. Secretary, that in people's minds they may conflate the ongoing Mueller investigation into links with Russia so this revelation that you had holdings in a company that has dealings with a Russian business and they weren't disclosed until only now with the release of the paradise papers.
WR: But that's not true. The Sibur relationship was known before. There's nothing in the paradise papers that's unique about the charter arrangement with Sibur.
GC: Do you think it looks good though? There will be those who say president trump campaigned on a clean the swamp campaign --
WR: right.
GC: -- in Washington and now we're seeing revelations about a member of the administration that, on the face of it, don't prove you did anything Wrong, but suggest maybe they don't look too good.
WR: I don't think they should suggest anything. A company not under sanction is just like any other company, period. It was a normal commercial relationship and one that i had nothing to do with the creation of it. I had nothing to do with the negotiations and do not know the shareholders that were apparently sanctioned at some later point in time.
GC: Mr. Blumenthal, Senator Blumenthal suggested there should be a more widespread investigation into your other holdings. Would you be happy to see that take place? Is there anything else that you feel you should be disclosing at this stage that may come out subsequently?
WR: Well, you say anything else there is nothing that wasn't disclosed, so the idea that I might add something new has a false premise. These holdings in navigator were disclosed.
GC: So you feel there was nothing remiss in terms of your approval process in the senate commerce committee?
WR: I don't think so. I frankly felt quite thoroughly x-rayed.
GC: the other issue I think that this story throws up in some way is the role of off-shore tax centres and the use of them. Again, these papers have revealed a number of high profile names, including the queen, who have been involved with these tax shelters. Given that you are now pushing through, or the administration is pushing through, a tax package that, in essence, continues to allow these shelters to exist but will seek to reduce taxation in some areas of the corporate landscape, would it perhaps be better for the administration now to go after some of these tax shelters and the way that they're used by companies and then maybe we could all pay less tax?
WR: Well, several things. Cutting the corporate tax rate and cutting the flow through tax rates will reduce people's motivation to use any of these other devices, but as long as that situation is totally permissible, you'll notice even in these papers, there was no suggestion there was any violation of any U.S .law. Well, I think a taxpayer's obligation is to obey the law, not to invent strictures beyond it.
GC: You've been a beneficiary of these off-shore structures in the past. You now wear a different hat given where you sit now, would it be in the best interests of the American people and others around the world that we did look at a way of reforming the use of these structures where they allow companies to avoid tax?
WR: Well, that's certainly -- well, it isn't so much avoiding tax. Eventually you pay tax when you sell things anyway, I believe. So it isn't that. It's a question of timing and formality. But the main thing is that should be part of overall tax policy consideration. I don't think we've seen enough detail of what came out of the republican caucus, at least I have not, to know whether they deal with that topic or they don't.
GC: Just to underline this, and I don't want to spend too much \more time on it because I know you've got a trip to china coming up that I'd like to ask you about. Did you ever as this news overnight was released on the paradise papers, did you ever consider your position in the administration and ask yourself whether you would continue in this role?
WR: No. That's a silly question. There was nothing wrong with anything that was done
GC: You don't feel there was any issue of perception and people's understanding of what your role might be
WR: No, I don't think so, because the navigator holdings were disclosed. The oge considered them, the office of government ethics, and declared that they were not something that had to be divested.
GC: And and you've made it clear you do not know Gennady Timchenko or Kirill Shamalov.
WR: No, not at all. I don't have any idea of them.
GC: You move on from here to head to china to talk about how to improve the trade terms with china for the United States. What are you seeking to gain from this trip?
WR: Well, the trip is not only a trade trip. I happen to be heading the trade mission of some 29 American companies going over there, and we hope that at least some of them will get good, finite economic deliverables as a result of the trip. There are also a myriad of other discussions the two presidents will be having, not the least of which is North Korea. So this is a trip that intends to cover not just trade, although that's my part of it, but all sorts of other issues.
GC: Japan is a friend and yet we saw in the press conference between Prime Minister Abe and the president some tough language around the trading relationship, perhaps putting japan on the back foot somewhat. Is the language only going to get tougher as the president continues his tour to other Asian countries, including china, which the U.S. believes it has an unfair trading relationship with?
WR: Well, we have deficits with many of those countries, particularly with japan and with china. The president has made no secret that he intends to reduce our trade deficits with those parties. Our preference is to have a combination of two things. One is increase our sales to them, our export sales to them. And, second, to have them stop violate practices. We have brought a very large number of trade cases against 35 countries around the world that are in effect right now. Enforcement is a very important part of the administration strategy. We think that even our friendly nations should live by the rules, and if they don't we will intend to enforce things against them. We brought 61% more trade cases so far this year than the prior administration had in the year to date the year before.
GC: Is there any risk that the Chinese seek to trade off assistance on North Korea for a lighter touch in terms of these trade issues ?
WR: Well, I can't read what's in the Chinese mind so I don't know, but they know very well that both topics are of great importance to the United States.
GC: why is it important now for you to get progress on these areas with Asian countries?
WR: It's not just Asian countries, it's with the whole world. We don't think it's inherent in a global trading system that one country, namely the U.S., absorbs in its deficit the cumulative trade surplus of the entire rest of the world. And we especially don't think that to the degree that that's due to subsidies and other illicit practices, that's not a good reason to have a deficit nor is it a good reason to have a deficit because other countries are so protectionist. The EU, china, and japan all talk free trade and they all practice protectionism. Let me give an example. Automotive is the largest product category of our trade deficit. Our tariff on autos is 2½%. 2.5%. EU's is 10% and china is 25% and in some cases a bit more. That's not a level playing field. And it's not a necessary playing field and it's the kind of thing that we feel needs to be rethought.
GC: Mr. Secretary, there were developments in Saudi Arabia through the last 24 hours. We've seen significant arrests of key princes, including Prince Al Waleed who has significant stakes in American companies. Are you concerned that this process may lead to both instability in the Saudi regime and damage on international markets as we fixate on what happens exactly to Prince Al Waleed in those positions?
WR: I'm not intimate enough with the details to have a very well-informed opinion. I do think that Saudi Arabia has become a very good friend of the United States. They've been very -- we've been very much supportive mutually. I was part of the big trip that went over there some weeks ago with very good results and it helped unify much of the Muslim world with our campaign against parties who would do us harm. So anything that interferes with that wouldn't be good, but I can't comment on their internal affairs.
GC: But at this stage you are not concerned and the administration is not concerned about the developments they see?
WR: I'm not the administration spokesperson on Saudi Arabia, that's much more the department of state and defence
GC: You have a lot of balls in the air at the moment, if I might put it in that way. You're juggling the NAFTA negotiations, as an administration you're focused on tax, you are now heading to Asia to see if you can get movement on the trading relationships there. And yet I think some are concerned that this government is taking on too many issues at the same time and failing to resolve the ones that it goes into battle over. I mean, when do we get a tax Deal? When do we get a NAFTA deal? When do we get better relations with china, japan, and other countries with an imbalance to the U.S.?
WR: Well first of all, I think we already have improved relationships with japan and with china. China, the last two sanctions against North Korea, voted in favours of them in the UN they could have vetoed them. We believe that china is enforcing the sanctions much better than they had been so I don't think it's a correct statement that our trade – that our relations haven't gotten better. I just don't think that's correct. Meanwhile, the president has cancelled over 800 rules that have been imposed on business by the Obama administration and there's barely a CEO who comes to my office that isn't thrilled with the regulatory relief. I believe a good portion of the reason why the economy has gotten better is because of regulatory relief and there's more to come, more to come in the way of regulatory relief. Those are important things and that's a promise he was able to deliver on through executive orders and he did, things that require cooperation of the congress he obviously does not have total control over so I don't think you can blame him when congress fails to act on something.
GC: Mr. Secretary, my last question, and I just want to circle back to where we started here, because there will be people watching who will have some doubts in their mind still as they read newspaper headlines saying Wilbur Ross has connections to president Putin that need investigating. Here's an opportunity just to send a message to those people who see this story in that light.
WR: Well, it's a very unfair characterization of it I don't know the people that were shareholders in Sibur. Sibur was never subject to sanctions to this very day. There's nothing wrong with a company that made the decision to enter into charters with them before I was even on the board. There's nothing wrong with it at all. I think it's just an example of the press trying to find anything they can, however remote or silly, to attack the president and somehow link him to Russia. This is nonsense.
GC: Mr. Secretary, thank you very much for joining us on CNBC and we'll wrap it up there.