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CNBC TRANSCRIPT: TREASURY SECRETARY STEVEN MNUCHIN SPEAKS WITH SQUAWK BOX FROM DAVOS TODAY

WHEN: Today, Friday, January 26, 2018

WHERE: CNBC's "Squawk Box" – Live from the World Economic Forum in Davos, Switzerland

Following is the unofficial transcript of a CNBC interview with Treasury Secretary Steven Mnuchin on CNBC's "Squawk Box" (M-F 6AM-9AM) live from the World Economic Forum in Davos, Switzerland today, Friday, January 26th. Following are links to video from the interview on CNBC.com: https://www.cnbc.com/video/2018/01/26/mnuchin-tax-reform-has-been-a-game-changer-for-us-businesses.html?play=1, https://www.cnbc.com/video/2018/01/26/mnuchin-what-i-said-about-the-dollar-wasnt-intended-to-make-news.html?play=1 & https://www.cnbc.com/video/2018/01/26/mnunchin-president-trump-has-been-clear-on-his-trade-agenda.html?play=1.

All references must be sourced to CNBC.

JOE KERNEN: ALRIGHT, WELCOME BACK TO "SQUAWK BOX." WE JUST HEARD FROM PRESIDENT TRUMP WITH HIS MESSAGE TO THE WORLD FROM DAVOS. RIGHT NOW, LET'S BRING IN HIS TREASURY SECRETARY, STEVEN MNUCHIN. MR. SECRETARY, IT'S IS GREAT TO HAVE YOU ON. THIS IS LIKE A BOOKEND. THEN WE'RE GONNA WRAP THINGS UP WITH YOU.

TREASURY SECRETARY MNUCHIN: THANK YOU. IT'S GREAT TO BE HERE. IT'S GREAT TO HAVE THE PRESIDENT HERE FOR HIS SPEECH AND THE END OF A GREAT WEEK.

KERNEN: WE'VE GOT, YOU KNOW, A FEW THINGS TO TALK ABOUT IN GENERALITIES, BUT ONE OF THE THINGS THAT WAS INTERESTING WHEN I SPOKE TO THE PRESIDENT WAS INTERESTING HAD TO DO WITH TRADE AND TPP. AND WE'VE BEEN KICKING THIS BACK AND FORTH WITH SKEPTICS AND PEOPLE THAT THINK WE'RE ON TO SOMETHING HERE. DO YOU HAVE ANY INSIGHT WHAT THE PRESIDENT IS THINKING ON THIS? IS MULTI-LATERAL BACK? IS TPP REALLY SOMETHING HE WOULD PURSUE SERIOUSLY?

MNUCHIN: I THINK THE PRESIDENT HAS REALLY BEEN VERY CLEAR ON HIS TRADE AGENDA. AND WHAT HE WANTS TO DO IS HAVE FREE AND FAIR AND OPEN AND RECIPROCAL TRADE. HE LIKES USING THE WORD RECIPROCAL BECAUSE IT'S VERY CLEAR. BASICALLY WE HAVE THE SAME TERMS. AND WE SPOKE TO THE PRESIDENT EARLIER THIS WEEK AND WE TALKED ABOUT THE TPP AND HE SAID, LOOK, IF I CAN GET A GOOD DEAL, THE RIGHT DEAL, I'LL GO INTO TPP, BUT IT WOULD HAVE TO BE THE RIGHT DEAL. BUT HE WOULD FUNDAMENTALLY RATHER NEGOTIATE BILATERAL.

ANDREW ROSS SORKIN: I WAS GOING TO SAY, BECAUSE HE'S PREDISPOSED TO BILATERAL APPROACH, IS IT EVEN POSSIBLE – IF YOU WERE HANDYCAPPING THIS AS A BETTING MAN, WHAT WOULD YOU DO? IF YOU WERE TRADING THIS?

MNUCHIN: I DON'T THINK WE NEED TO HANDICAP THIS, BECAUSE I THINK THE MESSAGE IS VERY CLEAR IN THAT WE WANT TO HAVE TRADE. I THINK PEOPLE HAVE INTERPRETED THIS IN OUR TOUR, WE HAVE TRADE ACTIONS AND WE WILL HAVE TRADE ACTIONS BECAUSE WE HAVE TO DEFEND AGAINST UNFAIR TRADE, BUT I THINK IN BOTH THE SPEECH AND WHAT HE SAID IN THE INTERVIEW, HE'S BEEN VERY CLEAR. HIS OBJECTIVE IS HE WANTS TO HAVE GOOD DEALS FOR AMERICAN COMPANIES AND AMERICAN WORKERS, AND IF THAT MEANS GOING INTO A MULTI-LATERAL, HE'LL CONSIDER IT.

KERNEN: I WOULD BE HESITANT TO ASK YOU ABOUT THE DOLLAR AGAIN BECAUSE YOU'RE PROBABLY SO SICK OF IT BUT—

MNUCHIN: NO, GO AHEAD. I'D BE UPSET IF YOU DIDN'T ASK ME.

KERNEN: NO, BUT I KNOW FOR A FACT YOU'VE ANSWERED IT SO MANY TIMES NOW IN THE LAST TWO DAYS THAT YOU MUST BE SO GOOD AT IT BY NOW, AT WHAT YOUR RESPONSE IS GOING TO BE, THAT IT'S JUST GOING TO -- YOU DON'T HAVE TO THINK ABOUT IT. BUT, DO YOU WANT TO WEIGH IN ONE LAST TIME?

MNUCHIN: RIGHT, SO I MADE THE COMMENT TWO DAYS AGO ON A PRESS GAGGLE IN THE MORNING. WHAT I SAID WAS ACTUALLY VERY EVEN HANDED AND CONSISTENT WITH WHAT I'VE SAID BEFORE. IT WASN'T INTENDED TO MAKE NEWS. AND HAD THE NEWS PRINTED MY ENTIRE TRANSCRIPT THE FIRST TIME AS OPPOSED TO JUST TAKING OUT ONE LITTLE POINT AND TRYING TO IMPLY THAT I WAS TRYING TO TALK DOWN THE DOLLAR, WHICH I WASN'T DOING. MATTER OF FACT, I WAS VERY CLEAR IN MY OPEN SAYING THE DOLLAR IS THE MOST LIQUID TRADING MARKET IN THE WORLD AND WHERE THE DOLLAR IS IN THE SHORT TERM IS NOT OF CONCERN TO US, AND WE RESPECT THAT THE MARKET SETS WHERE THE DOLLAR IS. AND, MATTER OF FACT, IN TREASURY WE HAVE A CURRENCY INTERVENTION REPORT. WE ACTUALLY ARE UPSET WHEN OTHER PEOPLE INTERVENE. SO THE FIRST PART WAS DOLLARS VERY LIQUID, WE DON'T CARE WHERE IT IS IN THE SHORT TERM. THE SECOND PART WAS STATING A FACT, THAT THERE ARE POSITIVES AND NEGATIVES OF WEAKER DOLLARS, AND THE THIRD IS CONSISTENT WITH WHAT OUR POLICY HAS ALWAYS BEEN: A LONG TERM DOLLAR REFLECTS THE ECONOMY AND THE RESERVE CURRENCY.

BECKY QUICK: MARIO DRAGHI WAS VERY UPSET. HE CAME OUT AND SAID THIS WAS A VIOLATION OF AN AGREEMENT BACK IN OCTOBER THAT A LOT OF NATIONS, INCLUDING THE UNITED STATES, CAME INTO. DOES THIS JUST TELL YOU THAT YOU HAVE TO BE SUPER CAREFUL WITH EVERYTHING THAT YOU SAY THAT COMES OUT OF THIS?

MNUCHIN: NO, I THINK WHAT IT SAYS IS, I'D ASK THE PRESS TO PRINT EVERYTHING I SAY BECAUSE I WAS VERY, VERY CAREFUL. I ASSUME MARIO DIDN'T SEE EVERYTHING I SAW AND HE WAS REACTING TO THE PRESS ON, YOU KNOW, ME IN ANY WAY IMPLYING I WAS TRYING TO MOVE THE DOLLAR, WHICH I ABSOLUTELY WASN'T.

KERNEN: ARE YOU LEAVING THE DOLLAR? DON'T LEAVE THE DOLLAR. BECAUSE – DO YOU HAVE A REASON WHY IT HAS GONE DOWN IN THE FACE OF ALL OF THIS GREAT ECONOMIC NEWS?

MNUCHIN: AGAIN, THE DOLLAR REFLECTS A LOT OF THINGS. OBVIOUSLY PART OF THE ISSUE IS WHERE OUR INTEREST RATES ARE, WHERE OTHER PEOPLE'S INTEREST RATES ARE. THE FED SETS OUR INTEREST RATES INDEPENDENTLY.

KERNEN: --- THE DOLLAR SHOULD BE GOING UP IF OUR RATES ARE HEADED UP HERE.

MNUCHIN: AGAIN, I'M GOING TO BE CONSISTENT. I'M NOT GOING TO COMMENT, I'M NOT GOING TO COMMENT ON THE DOLLAR.

SORKIN: OKAY, I'LL MOVE TOPICS. I WANT YOU TO REACT TO THE GDE NUMBER. 2.6%. IT'S NOT THE 3% THAT THE PRESIDENT WANTED. WHAT DO YOU THINK?

MNUCHIN: YOU KNOW, I THINK WE'RE GOING TO SEE SHORT-TERM ARBITRATIONS IN A QUARTER. I THINK WE'RE VERY COMFORTABLE WITH WHAT I HAVE BEEN SAYING IS THAT OUR OBJECTIVE IS SUSTAINED 3% GDP OVER THE LONG-TERM, SO WE'RE NOT CONCERNED ABOUT ANY ONE QUARTER WHICH COULD BE REVISED UP OR DOWN.

SORKIN: AND THE OTHER THING I REALLY WANTED TO SAY YOU ABOUT –

MNUCHIN: AND BY THE WAY, I WOULD SAY RELATIVE TO WHERE EVERYBODY ELSE WAS TALKING IN THE BEGINNING OF THE YEAR AT 2.1 AND 2.2, I MEAN I THINK PEOPLE NOW EXPECT WE'RE GETTING TO 3% GDP.

SORKIN: TAX QUESTION FOR YOU. SO THIS TAX REFORM PACKAGE HAS CREATED SO MUCH OPTIMISM IN HERE IN DAVOS, NOT JUST AMONG AMERICAN LEADERS BUT GLOBAL LEADERS. AND YOU ARE NOW HEARING FOR THE FIRST TIME OTHER COUNTRIES SAY, "MAYBE I NEED TO REFORM OUR OWN TAX PLAN." WITH SOME SAYING, "WE NEED TO DO IT QUICKLY," BY THE WAY, "BEFORE FOREIGN COUNTRIES DECIDE TO INVEST TOO MUCH MONEY IN THE UNITED STATES." WHAT DO YOU THINK OF THAT?

MNUCHIN: WELL I COULDN'T, FIRST OF ALL, WE COULDN'T BE MORE PLEASED WITH THE WAY THE TAX PROGRAMS HAS COME OUT AND THE REACTION THAT WE'VE GOTTEN FROM COMPANIES. WE'RE OVER 2.5 MILLION AMERICANS NOW THAT ARE GETTING SPECIAL BONUSES. WE HAVE LITERALLY HUNDREDS OF BILLIONS OF DOLLARS OF COMMITMENTS. I MEAN, IN MY CONVERSATIONS WITH OTHER FOREIGN MINISTERS – FINANCE MINISTERS, I THINK WE'VE HAD A CONSISTENT MESSAGE THAT NOBODY WANTS TO RACE TO THE BOTTOM. THAT WHAT WE ARE REALLY TRYING TO DO WAS ONE, FIX A BROKEN SYSTEM, GO TO A TERRITORIAL SYSTEM FROM A WORLD-WIDE SYSTEM WHICH IS IN EVERYONE'S INTEREST, AND HAVE A COMPETITIVE TAX RATE WHICH—

SORKIN: BUT DO YOU WORRY NOW ABOUT A RACE TO THE BOTTOM? I MEAN, IF IN FACT – DO YOU SEE –CAN YOU IMAGINE CERTAIN COUNTRIES IN EUROPE, FOR EXAMPLE, TAKING THE KIND OF STEPS THAT WE TOOK?

MNUCHIN: YOU KNOW, I WOULD ENCOURAGE – EUROPEAN COUNTRY HAVE COMPETITIVE TAX RATES. SO I THINK THEY SEE THE SUCCESS THAT IT'S HAD. I THINK OUR ISSUE HAS BEEN AROUND TAX HAVENS AND GETTING RID OF THE INTERNATIONAL TAX SYSTEM IS A LOT LESS OF AN ISSUE FOR US WITH THAT.

QUICK: SECRETARY STEVEN MNUCHIN, LET'S TALK A LITTLE BIT ABOUT INDIVIDUAL TAXES, AND SOME OF THE THINGS THAT HAVE COME FROM THAT. THERE HAVE BEEN STATES – NEW YORK, NEW JERSEY CALIFORNIA, – THAT HAVE THOUGHT ABOUT DOING THINGS TO ALLOW THEIR CITIZENS TO KIND OF SKATE AROUND ON SOME OF THE HIGHER SALT TAXES THAT ARE GONNA BE IMPOSED. YOU SAID THAT YOU THOUGH THE IDEA OF ALLOWING PEOPLE TO MAKE CHARITABLE CONTRIBUTIONS TO THE STATE THAT WOULD THEN GET WRITTEN OFF WOULD BE RIDICULOUS. THE IRS HAS RECENTLY COME OUT WITH SOME GUIDANCE, I THINK YESTERDAY, THAT SUGGESTED THE SAME, BUT THE IRS WAS SOFTER OF THE IDEA ALLOWING STATES TO PUT MORE IN TERMS OF PAYROLL TAXES, TAKE THAT OFF INDIVIDUALS, AND THE COMPANIES CAN STILL WRITE THAT OFF. HOW DO YOU FEEL ABOUT THAT PARTICULAR TYPE OF SITUATION?

MNUCHIN: WELL, I DON'T THINK THE IRS WAS NECESSARILY SOFT ON THAT. I THINK THE IRS HASN'T COMMENTED. SO WE'RE VERY COORDINATED BETWEEN THE OFFICE OF TAX POLICY AND TREASURY AND THE IRS, AND WE'LL LOOK AT THINGS AS THEY COME OUT. AND LOOK, I UNDERSTAND THE ISSUE OF NEW YORK AND CALIFORNIA, I'VE LIVED IN BOTH PLACES. THE TAXES ARE TOO HIGH THERE. I MEAN, WHAT I WOULD TELL THOSE STATES IS THEY SHOULD FIGURE OUT HOW GOOD THEY CAN MAKE THEIR TAX SYSTEMS MORE COMPETITIVE. BUT ONE OF THE THINGS WE DID DO BY DROPPING THE TOP RATE A LITTLE BIT, WE OFFSET SOME OF THE ISSUE OF THE ELIMINATION OF STATE DEDUCTIONS.

QUICK: ANYBODY TRYING TO GET AROUND IT, WOULD THEY BE FACING AUDITS?

MNUCHIN: I WOULDN'T MAKE A COMMENT OF AUDITS. I WOULD JUST SAY FROM A STATES STANDPOINT, YOU KNOW THE IRS HAVE THE ABILITY TO INTERPRET INTENT. SO TO THE EXTENT THAT THE STATE TRYING TO DO SOMETHING THAT FUNDAMENTALLY GETS AROUND THE INTENT OF THE TAX LAW, THAT WE CAN TAKE ACTION AGAINST THE STATES.

KERNEN: NEW CALIFORNIA IS GOING TO HAVE LOWER TAX RATES, BECKY.

SORKIN: RAY DALIO –

KERNEN: -- I WANNA – LET ME JUST ASK YOU, WHEN YOU GO BACK, I MEAN, YOU'RE DONE WITH TAX REFORM. I MEAN, YOU'RE GOING TO STAY TREASURY SECRETARY FOR A LONG TIME, RIGHT?

MNUCHIN: I AM.

KERNEN: YOU DOING INFRASTRUCTURE? WHAT ARE YOU TACKING TO?

MNUCHIN: WELL, THE FIRST THING I WOULD SAY IS YOU KNOW, THAT NOW THAT WE GOT THE TAX REFORM PASSED, WE HAVE A MAJOR IMPLEMENTATION WITH THE IRS. SO THIS TOUCHES EVERYTHING WE DO FROM FORUMS TO CUSTOMER SERVICE TO TECHNOLOGY. SO FOR THE NEXT SIX MONTHS I'M WORKING CLOSELY WITH THE IRS ON THE IMPLEMENTATION AND ALSO VERY FOCUSSED ON SANCTIONS. WE'LL CONTINUE TO FOCUS ON SANCTIONS WHETHER IT'S NORTH KOREA, IRAN, VENEZUELA, THE WHOLE LIST.

SORKIN: I JUST WANT TO ASK YOU, RAY DALIO SAT WHERE YOU WERE SITTING EARLIER THIS WEEK AND HE SAID, LOOK, IF YOU'RE NOT IN THE MARKET NOW, YOU'RE GOING TO FEEL STUPID, AT LEAST FOR THE SHORT-TERM. BUT HE ALSO SAID THAT HE WORRIES ABOUT, EFFECTIVELY, THAT WE MIGHT BE CREATING A BUBBLE. MAYBE THINGS WILL RUN TOO HOT. THAT ACTUALLY ALL OF THESE MEASURES WOULD HAVE SUCH A GREAT STIMULUS EFFECT, AND THIS IS SORT OF A COMPLICATED ISSUE FOR YOU, BECAUSE YOU WANT IT TO HAVE A STIMULUS EFFECT, BUT HE SAID HE THINKS MAYBE AS WE GET CLOSER TO 2020, IT GETS COMPLICATED VERY QUICKLY. DO YOU AGREE WITH HIM?

MNUCHIN: WELL, YOU KNOW, AGAIN, AS IT RELATES TO THE STOCK MARKET THAT'D BE LIKE THE SAME AS THE DOLLAR. I'M NOT GOING TO COMMENT ON WHERE IT IS IN THE SHORT-TERM.

SORKIN: BUT I THINK – UNDERLYING THAT HE'S ALSO TALKING ABOUT THE ECONOMY.

MNUCHIN: I DO THINK FUNDAMENTALLY THIS IS A GAME CHANGER FOR U.S. BUSINESSES, YOU'RE GONNA SEE MASSIVE INVESTMENT COME BACK INTO THE U.S. I MEAN AS THE PRESIDENT SAYS WE WERE WITH MANY CEOS LAST NIGHT THAT SAID AS SOON AS THE TAX PLAN IS CHANGED, THEY'RE MOVING OPERATIONS TO THE U.S. TO BUILD THINGS FOR THE U.S. MARKET, I MAY ADD, WHICH MAKES THEM MORE EFFICIENT IN EMPLOYING U.S. WORKERS. BUT, YOU KNOW, I THINK FOR THE FORESEEABLE FUTURE, WE'RE GONNA HAVE A STRONG ECONOMY.

KERNEN: YOU WRITE THE SPEECH?

MNUCHIN: I DIDN'T WRITE THE SPEECH.

KERNEN: ANY OF IT?

MNUCHIN: I LOOKED AT IT AND MADE A FEW COMMENTS.

KERNEN: WHAT'D YOU THINK?

MNUCHIN: I THOUGHT IT WAS GREAT.

KERNEN: I THOUGHT IT WAS GONNA BE A FULL THROATED SALES PITCH FOR THE UNITED STATES GOING BUSINESS THERE, RIGHT? THAT WAS THE POINT, RIGHT?

MNUCHIN: I THINK THE PRESIDENT IS THE BEST SALESPERSON AS HE SAID FOR AMERICAN WORKERS AND AMERICAN COMPANIES AND WE LOVE HAVING HIM HERE AND ON THE ROAD.

SORKIN: CAN YOU TELL US HOW YOU ALL DECIDED TO DO THIS? MEANING TO ACTUALLY TAKE US INSIDE THE ROOM. BECAUSE I KNOW THAT TO BRING THIS TYPE OF GROUP TOGETHER TAKES A LOT OF COORDINATION AND IT IS A BIG DECISION.

MNUCHIN: WELL, I WILL TELL YOU THE DECISION EARLY ON FOR ME TO LEAD THE ECONOMIC DELEGATION WAS MADE EARLY ON. SO ALTHOUGH WE DIDN'T DENOUNCE THAT UNTIL LATER, THAT'S BEEN IN THE PLANS ALL ALONG. I WILL TELL YOU THE PRESIDENT CALLED AN AUDIBLE, HE MADE THAT DECISION HIMSELF. HE CALLED US UP AND SAID I DECIDED I AM GOING TO COME WE MOVED AN AWFUL A LOT OF THINGS TO PUT THIS IN PLAY.

QUICK: DO YOU THINK HE'S HAPPY HE DID MAKE THAT DECISION TO COME?

MNUCHIN: WHAT'S THAT?

QUICK: DO YOU THINK HE'S HAPPY—

MNUCHIN: OH, HE'S ABSOLUTELY HAPPY. I THINK HE WAS THRILLED. AND BY THE WAY, YOU KNOW, I'VE HEARD SO MANY PEOPLE HERE THAT THEY APPRECIATE IT. WE HAVE THE LARGEST U.S. DELEGATION EVER. I MEAN, I CAN TELL YOU, YOU KNOW, FROM THE BEGINNING IN THE MORNING UNTIL LATE AT NIGHT, I MEAN, I WAS PROGRAMMED EVERY 15-MINUTE AND I PROBABLY MET WITH 15 DIFFERENT FINANCE DIRECTORS WHILE I WAS HERE, AT LEAST 40 OR 50 CEOS, OTHER PEOPLE, SO IT IS A GREAT USE OF TIME FOR OUR WHOLE DELEGATION.

SORKIN: WHAT DO YOU THINK LED TO IT THOUGH? I MEAN, SOME PEOPLE SAID PRESIDENT XI BEING HERE LAST YEAR INSPIRED HIM TO DECIDE THAT HE WANTED TO BE HERE. OTHER PEOPLE SAID THERE WAS DIFFERENT PHONE CALLS, LIKE MACRON AND OTHERS HAD TALKED TO HIM. DO YOU KNOW?

MNUCHIN: I DO KNOW. I'M NOT GOING TO SPECULATE AND SAY IT HAD NOTHING TO DO WITH PRESIDENT XI. BUT THE PRESIDENT SPOKE TO A FEW PEOPLE, I'M NOT GOING TO SAY AND HE DECIDED TO COME. AND AS I SAID, HE COULDN'T BE HAPPIER.

SORKIN: WILL HE BE BACK?

MNUCHIN: WILL HE BE BACK? WILL I BE BACK?

SORKIN: I KNOW YOU'LL BE BACK. WHAT ABOUT THE PRESIDENT?

MNUCHIN: I AM GOING TO LEAVE YOU GUYS GUESSING ON THAT ONE. I DON'T KNOW.

KERNEN: YOU KNOW, WE SHOULD PROBABLY KEEP THE GOVERNMENT OPEN IN THE NEXT TWO – THAT'S HAPPENING AGAIN.

MNUCHIN: I AGREE WITH YOU 100%, WE SHOULD KEEP THE GOVERNMENT OPEN –

KERNEN: IS IT GOING TO STAY OPEN?

MNUCHIN: – WE SHOULD RAISE THE DEBT LIMIT, BY THE WAY, THE DEBT LIMIT IS COMING UP.

KERNEN: THE PRESIDENT, YOU KNOW, PEOPLE DON'T TRY TO TAKE THINGS PERSONALLY BUT I THINK CHUCK SCHUMER FEELS LIKE MAYBE HE – THE PRESIDENT GOT THE BEST OF HIM, AND I'M JUST WONDERING IF THAT MAKES HIM EVEN TOUGHER TO NEGOTIATE WITH IN TWO WEEKS. WHAT DO YOU THINK?

MNUCHIN: I DON'T THINK THIS IS ABOUT ANYBODY GETTING THE BEST OF ANYBODY ELSE.

KERNEN: OH PLEASE.

KERNEN: I THINK HOPEFULLY THE DEMOCRATS REALIZE HOW IMPORTANT IT IS TO KEEP THE GOVERNMENT OPEN.

KERNEN: THEY'RE GOING TO FUND THE WALL?

MNUCHIN: I THINK THEY PUT AN OFFER ON THE TABLE TO FUND THE WALL AND IT LOOKS LIKE THERE IS AN IMMIGRATION DEAL IN THE WORKING AND I AM CAUTIOUSLY OPTIMISTIC.

KERNEN: THAT WOULD BE AMAZING.

QUICK: I HAVE ONE QUESTION FOR YOU. IT'S VERY EARLY ON IN THE CHANGES WITH THE TAX LAW, WE'RE LOOKING LESS THAN A MONTH, BUT YOU SEE THE TAX RECEIPTS COMING IN ALL THE TIME. ARE THEY ABOVE OR BELOW WHERE YOU MIGHT HAVE ANTICIPATED THEY'D BE, WITH THIS NEW LAW IN PLACE?

MNUCHIN: I HAVEN'T SEEN, I HAVEN'T SEEN THIS MONTHS TAX RECEIPTS YET, BUT OUR EXPECTATION IN THE TAX PLAN WAS DESIGNED THAT THE REVENUES WILL GO DOWN SLIGHTLY IN THE SHORT-TERM BECAUSE WITH AUTOMATIC EXPENSING, THAT INCENSE PEOPLE TO PUT A LOT OF CAPITAL TO WORK BUT IT ALSO REDUCES OUR TAX REVENUES IN THE SHORT-TERM. SO I THINK YOU CAN'T REALLY LOOK AT THIS YEAR'S REVENUES AS REFLECTIVE.

QUICK: BUT WHAT ARE YOUR EXPECTATIONS? IF DOWN SLIGHTLY, DOWN BY HOW MUCH? WHAT WOULD THAT BE?

MNUCHIN: AGAIN, I'M NOT GOING TO COMMENT ON THAT NOW. WE'RE NOT PUTTING OUT PROJECTIONS. BUT DIRECTIONALLY, THEY'RE GOING TO BE DOWN.

KERNEN: YOU KNOW THE WAYS OF HOLLYWOOD WELL.

MNUCHIN: I DO.

KERNEN: HE KNOWS ABOUT AGENT FEE. YOU KNOW WHAT YOU DID TO US WITH THE AGENT – DO YOU KNOW WHAT YOU DID TO US? WE CAN'T WRITE OFF OUR AGENT FEES ANYMORE. DID YOU REALIZE THAT? DO YOU NOT LIKE – BECAUSE YOU WORKED OUT THERE AND YOU LOOK AT ANDREW AND YOU DON'T LIKE US?

MNUCHIN: NO, I'M NOT GOING TO GIVE YOU TAX ADVICE. BUT I CAN – FOR SMALL BUSINESSES, WE HAVE THE LOWEST RATE SINCE THE 1930s.

SORKIN: YOU NEED TO BECOME A LOAN OUT. A LOAN OUT CORPORATION.

MNUCHIN: THAT'S WHAT HE'S – YOU NEED TO DO MY TAXES, ANDREW.

MNUCHIN: GO HIRE PEOPLE AND CREATE A SMALL BUSINESS.

SORKIN: I JUST WANT TO COME BACK TO TRADE ONE MOMENT WHICH IS THIS NAFTA, BECAUSE WE HEARD THAT WHEN THE PRESIDENT SPOKE TO SOME OF THE AMERICAN CEOS LAST NIGHT, MAYBE IT WAS JOKING BACK AND FORTH AND HE TALKED A LITTLE BIT ABOUT IT. I LIKE TO RIP UP NAFTA COMPLETELY, I HAVE OTHER PEOPLE ON MY TEAM WHO'D LIKE TO RENEGOTIATE NAFTA. WE'LL SEE WHO'S GOING TO WIN.

MNUCHIN: I THINK THE PRESIDENT HAS BEEN VERY CLEAR SINCE THE CAMPAIGN THAT HE WANTS A BETTER DEAL. SO HIS INTENT HAS NEVER BEEN TO RIP IT UP. HIS INTENT HAS BEEN TO RE-NEGOTIATE IT. I THINK THE PRESIDENT – HAS SAID KIND OF THE BEST WAY TO NEGOTIATE A DEAL IS TO RIP IT UP AND START OVER, BUT WE ARE AN ACTIVE DISCUSSION AND WE'LL SEE HOW IT TURNS OUT.

QUICK: THANK YOU, SIR.

SORKIN: THANK YOU. REALLY APPRECIATE YOU COMING.

MNUCHIN: GOOD TO SEE YOU.

SORKIN: GREAT TO SEE YOU.

QUICK: GREAT TO SEE YOU TOO.

MNUCHIN: THANK YOU.

SORKIN: OKAY, MR. SECRETARY, MAKE SURE TO JOIN US, WE'LL BE BACK ON MONDAY IN NEW YORK.

For more information contact:

Jennifer Dauble
CNBC
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e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
e: emma.martin@nbcuni.com

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