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CNBC Transcript: Reince Priebus, Former Chairman, Republican National Committee & Former White House Chief of Staff

Following is the transcript of CNBC's exclusive interview with Reince Priebus, Former Chairman of Republican National Committee & Former White House Chief of Staff at the Credit Suisse Asian Investment Conference in Hong Kong. The interview was broadcast on Squawk Box on 21 March 2018.

All references must be sourced to a "CNBC Interview'.

Interviewed by CNBC's Akiko Fujita.

Akiko Fujita (AF): Welcome back to Squawk Box. We are back for day three of Credit Suisse's Asian Investment Conference. We've been talking a lot about the business environment and trade. We're going to continue that conversation, maybe add a little politics into the mix, because our next guest is Reince Priebus, he's the former White House Chief of Staff under the Trump administration from January to July 2017. He previously served as Chairman of the Republican National Committee and he joins me here in Hong Kong. Glad to see you in Asia.

Reince Priebus: Hey I'm happy to be here, thank you for having me.

AF: There's certainly a lot to discuss but I want to start with some of the headlines that have been dominating at least the markets and we're talking about the Facebook story that broke several days ago. Cambridge Analytica coming out and saying they were able to harvest 50 million users' data to sway the election. Now the claim coming from Cambridge Analytica has been that this data that they got from Facebook had a significant impact on the presidential election. What's your read?

Reince Priebus: Well you know, I don't know how true some of these claims are. I mean certainly from the Republican National Committee's standpoint, which was the data firm of the Trump campaign, which is what we built at the RNC, we didn't use Cambridge. So I don't, I don't know, how true any of these claims are. I don't know if their folks were bragging that they were doing things that they weren't, maybe they were doing those things, I don't know.

AF: This was a firm though that was hired on by the campaign had very close ties, Robert Mercer, Steve Bannon.

Reince Priebus: That's what they say. But you know at the time, we just weren't relying on them so maybe initially they played ball with the campaign, but it wasn't soon after we merged with the Trump campaign, that they went on a full blown RNC data. So I think they themselves in November or December of last year said the same thing, that they were using RNC data not Cambridge's Analytica.

So look I don't know. I mean this is something that I think people are going to figure out pretty quickly. When you have losses like that in the markets, believe me, shareholders will make their claims and they will figure it out. So I'm anxious to hear what the story is, but as far as we're concerned, you know RNC data was the driver, we built something very special. Nothing's like our data. It's the best there is and that's what got President Trump at least on that piece of the campaign to where he was, not the company in the United Kingdom.

AF: How big of a role did Robert Mercer have in terms of…

Reince Priebus: I have no idea. I mean, I have no idea what roles everyone played. I know the role I played, as chairman of the RNC and rebuilding our data operation, and it was built by a lot of hard work and a lot of donors that helped us but it wasn't that company.

AF: Let's talk about one of the issues that have really dominated discussions here on the ground at Credit Suisse which is the issue of trade. There seems to be a lot of nervousness among business leaders about how this President plans to tackle the trade deficit and the extent to which he's willing to go. It's one thing to slap tariffs on solar panels and washing machines, it's another to go after 60 billion dollars in Chinese products and IP. You know the question is, is this the Trump administration's policy to really tackle the trade deficit or is this just part of the negotiating tactic?

Reince Priebus: Well maybe both. I certainly think it's always a negotiation with President Trump. I think he likes putting all of his pieces on the table like he did initially and saying we're going to have a blanket tariff on steel and aluminium, and then slowly but surely you saw he pulled Canada off the table, he pulled Mexico off the table, had a conference call with the Australian Prime Minister, pulled them off the table. I think it's the type of thing the president wanted to do. Put people on their heels and say I'm going to tackle this trade imbalance once and for all. People have been talking about it for decades and it's something he's talked about since 1980, so it's not like this is a new policy. Everyone likes to talk about populism and nationalism. This is Trump-ism. He, he has been talking about this. He's president. It's something that when I was there he never let go of. Every two weeks if we didn't talk about trade or what we were doing about it he would bring it up and we would have the argument and we would fight it out. But ultimately his default position is what you're seeing right now.

AF: So we did hear from Premier Li Keqiang over in Beijing yesterday saying, look we are open to fair trade but it needs to be a two way track. And I have to wonder how far do the Chinese need to go in order to try and quiet some of the concerns for the U.S.. Is this all about the transfer of IP, is it something bigger?

Reince Priebus: Well it's IP, I think it's some technology transfers, I think it's just pure trade imbalances. You know when you have cars that come into the United States with no tariff at all, and then you've got cars going into countries in Asia and around the world with 25, 50 percent, in some cases 100 percent tariffs, where they have to send motorcycles to places like India in parts and then rebuild motorcycles in India in order to avoid tariffs. This is the unfair competition that President Trump is talking about. So I don't know where it's going to lead but I do think it's a healthy conversation. You know I'm not a tariff person. I'm more of a free trade guy. But the president won this election really adopting both the principles of the Republican Party and a few of his own that he's been talking about for decades.

AF: Is it the principles of the Republican Party though? I mean the Republican Party for a long time has been pro-trade.

Reince Priebus: In this case on trade you're right. That's my point though. There are some issues that the president's been talking about for decades that don't necessarily fall on line directly with the Republican Party but he's not an inline kind of guy. He's a guy who does a really good job of representing our party. But on some issues he's going to say 'heck with that I believe something is wrong with what's happening in this trade war'.

AF: It sounds like though, based on what you're saying, that if the Trump administration is serious about tackling this trade deficit especially with China, it's not a whole lot of concessions Washington is really willing to make on their side.

Reince Priebus: Oh I don't know about that. And that could, you know, escalate into a full blown trade war.

I don't know about that. I think what we need to do and what folks here in Asia need to do is just sit back and wait and see. And number one be patient, number two play ball. Work with the president. Talk to him about what the issues are in your country and you know more times than not if you watch his actions, he'll put a pretty, he'll put the marker down on the table, but if you watch his actions if you present a reasonable argument to the president, he will tend to compromise individually one on one on a bilateral basis, that I think people should understand.

AF: I thought it was interesting in a recent interview, you said, you know how the president makes decisions. You talked about the president wanting these intellectual rivals around him essentially, he has them fight it out and then a decision is ultimately made. Now we obviously cover the drama but the decision is made behind the scenes and the reason I bring that up is because increasingly it looks like there's not a lot of rivals within the White House, you talk about the exits that have happened…

Reince Priebus: Well much to the chagrin of the press perhaps, I'm not so sure…

AF: When you talk about the recent exits, Rex Tillerson, you know, fired after speaking out against Russia, although this, you know, had been in the works…

Reince Priebus: It had been in the works, sure.

AF: For some time. You talk about Gary Cohn, somebody who was very much against these tariffs that were placed on steel and aluminium. Are you getting the sense that the president is more comfortable with people who agree with him, and is that ultimately good a thing?

Reince Priebus: You know, I don't. I think the president is actually more comfortable with a good argument. And if you look at who replaced Gary Cohn, it was Larry Kudlow. Larry Kudlow's been very, as you know, very, even on your own station, very open with his feelings on tariffs, he doesn't agree with them. But the president says, 'I don't care. I like Larry, I like the intellectual horsepower he brings to the table, he put them there anyway'. Mike Pompeo and Rex Tillerson are not all that different in their views on foreign policy.

AF: I mean on the Iran deal though, I mean is there…

Reince Priebus: Well, I don't know, we'll wait and see, we'll see what Mike Pompeo says. Whether Iran is in technical compliance or not it's something that that team will evaluate and bring him to the President and talk about. So I don't believe so. I think the President actually is more comfortable with a good argument and a fight in front of him over something important to him. And I have seen, I honestly, I've seen it with my own eyes. He actually respects people that fight it out and even if they get animated on a particular subject that they're really smart about, he'll respect it and I've seen it. And I think if you look at the results, the results have been pretty good.

AF: The results on…

Reince Priebus: The results, you look at ISIS, you look at the economy, you look at regulations, you look at jobs, you look at wage growth. I mean if you're a Republican, put tariffs aside, because that's a Trumpian—that's an issue that he's championed for years. But you put that aside and you look across the board, the decisions that have been made by this president including the courts and everything else if you're Republican, you're pretty happy.

AF: When you look at what has really been a revolving door over the last few weeks, you know there's a sense, at least looking from this perch here in Asia, that there's a bit of an unravelling that's happening over at the White House. You talk about the exit of Hope Hicks, Rob Porter. We talked about Rex Tillerson, we talked about Gary Cohn. Is that an unfair characterization? It seems like things are increasingly just going along with what President Trump wants and not necessarily getting pushback inside the White House, which is the role that you play when you first came in.

Reince Priebus: Yeah, you know what, look, I think, me included, I think people understand that President Trump is a man of, he's someone of action. Honestly, I worked for all kinds of people in my life. I've always been able to outwork anybody. President Trump is the exception to the rule. I mean he's a guy who never stops. And so I think in the case of working for President Trump, I think people have worked really hard. I think that some people are ready to leave because they're either tired or they feel like it's time to move on. But I don't believe it's because they don't enjoy working in the White House or working for the president. I just think it's a really hard job. And I think in this particular case, if you look at the accomplishments of President Trump over the last year, I think it's pretty incredible. But with each one of those accomplishments comes an enormous amount of work and to put all that together, I think is what contributes to the fact that people are going off to do other jobs.

AF: Let's look ahead to the midterm elections later this year. When you look at the two special elections that have taken place over in Pennsylvania, as well as Alabama, Democrats taking big wins in what have been traditionally very red areas. What does that say about voter sentiment, what do you draw from there in terms of …

Reince Priebus: I think, you know look for the party that's not in power you have a headwind. It happens all the time. Other than maybe 2002 after 9/11, really most of the time the other party wins a lot of seats and so I think you've got a lot of that. I don't necessarily think it's anything to do with the Trump approval number because if you look on Election Day…

AF: But these are candidates that the president campaigned for. In very red areas…

Reince Priebus: That's right. You can't deny it. But I think a lot of it has to do with the fact that the party not in power is a party that has a lot a lot of headwind to take on. Also sure it is some of the things that the President does but the President is bold, the President is taking risks and chances. Some of it's going to have an upside, some of it's going to have a downside. And candidate recruitment is part of it. I mean this guy Conor Lamb was a great candidate. You can't deny it. I mean, so look, I think it's going to be a tough year, but I think the president and the Republicans in the House can do better than people expect by continuing down the road of building on the tax cuts, wage growth, the economy, all those things might be a mitigating force.

AF: You think the Democrats can take back the Senate?

Reince Priebus: I don't think so because it's much different there. The races in the Senate seats serve like you know West Virginia. You know, they're the types of things where not only do they have to win in Republican states but they have to hold seats in big Republican states like West Virginia and North Dakota and places like that. It's very difficult in the Senate. House might be in play but not the Senate.

AF: You know, finally I mean, you used to be the head of the RNC. We talked about sort of how the Republican Party has shifted some ways, at least on the issue of trade and some other areas too. Who is the Republican electorate now? How would you describe the Republican electorate?

Reince Priebus: Well I think, I think I don't think the Republican party's changed a lot. I think President Trump is an entity all, you know among himself. I mean he's a force of his own making. And I don't think there will be another President Trump. I don't think the party's changed but I think people in our party are more willing to be open to things that necessarily weren't coming into play, like trade, for standing up for the American worker which is what our party used to be. These are all things that the president has built on and that's what made him win Pennsylvania, Michigan, Wisconsin. You know the run of the mill Republican candidate wasn't winning those states. But President Trump said…

AF: So you don't think the President has fundamentally shifted the Republican party further to the right?

Reince Priebus: No, I don't. I think the President is a force in and of himself, which the Republican Party has benefited from. But he is his own person. And I don't think there'll be another, another President Trump for a long time.

AF: I think a lot of people can agree on that right.

Reince Priebus: You bet.

END