Chuck Hagel: China's problems are just starting to surface

Channel: Fox Business
Published: 06/06/2019

Description
Former Secretary of Defense Chuck Hagel on the mounting U.S. trade tensions with China, the 2020 presidential race and the state of the Republican Party. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and...



Transcript
Do you worry about the trade of situations? It seems to be escalating now, not only with the mexicans, the latest entrant here, but with the chinese, and that economic warfare might be just as dangerous yeah. I do. I worry about it very much. Your point about economic warfare may be just as dangerous absolutely because our economy, the economies of the world, are now interconnected, you're not goi ...
g to want unwind those economies. Technology has changed that if, for no other reason - and so you look at these trade treaties - we've had over the years, for example in nafta - i think nafta has been one of the most successful trade treaties. We'Ve ever had ask farmers ask ranchersask people i used to represent in the midwest small businesses. They'Ve never done so well because of the that 20 year treaty, but these are important because it brings people together. You start down the down the path of tariffs and trade waters. There will be consequences definitely, but there'll also be unintended consequences that will have a devastating effect on our economy, on economies of the world, on standards of living and where that stops and where that ends. No one is ever sure so, yes, the economic warfare is, is right at the top of challenges. Well, the reason why i've mentioned it secretaries, the president, is convinced that, as you know, china has been taking advantageof us for years and granting special favor to their industries. That are expense and that they kind of started the so we're responding in kind and getting them to recognize.

It will be different under this new sheriff. What do you think of that man? Well, i do think that china has taken advantage of their membership in the wto. That day, as you know, became a member 20 years ago. I i do think they've been deceitful. I do think they've shut our companies out a lot. I think that's real, but it's a matter of how you deal with it, how you manage it, how you approach it? I don't think the way to do that. Isunilaterally arbitrarily saying well we're just going to tariff the hell out of you and then i know you know them far better than i, sir, but what if they do buckle, they realize they need some sort of agreement much more than we do so they they blink Or whatever you want to call it, what do you think? Well, i don't know if you want to take that chance. I don't i don't know what the chinese are going to do. I don't read their minds. I don't know how many people in this country are that smart do to know what the chinese are going to do, though i can tell you this. I'Ve dealt with thechinese for many many years. First time i went to china was 1983 as a business man.

I'Ve dealt with him as a senator or secretary of defense in many capacities businessman, and they often remind me, we've been around 5,000 years, we're patient. We know how to deal with these things, so we've got to come up with a smarter way. Why don't we do this with allies, with alliances what's going on in china and and the blowback against our markets is happening to other countries too? Why not? Why don't we take the force of those numbers and start there? There'S a wto which was set up to deal with some of these things. It'S not perfectand by the way we've won foreign port cases in the wto, leave over loss, but a lot of other ways to do this. But once you start down that track a really potential warfare, you're gon na you're gon na, have your hands full and where this goes and ends up is uncertain. I don't want to take that chance. Maybe some do, but i don't want to take that chance with our economy in our position and our standing in the world. You know it's a former defense secretary and all i'd be curious to get your view on negotiating from what the president says is a position of strength. We have the world's best economy. People can debate thatbut the that that we're at a position now that we'll never be in to machines from the chinese and and and right the ship, so to speak. What do you think? Well, i think that's pretty simplistic. I mean because we have the most powerful military on earth and the largest economy we're in a position now to make demands that we may not be in a position to do later.

I think that's pretty simplistic, i don't think the world works that way. I don't think the chinese work that way the chinese got a lot of problems in inside many problems and i think they're just starting to surface and i think they're gon na have a lotof problems for a long time. But again i don't think that's a smart way to handle them. We we, the united states, are going to have a strong military, a strong economy, a strong system, national laws constitution. We can self-correct we're going to be around a while unless we really really make stupid mistakes over the next few years. We'Re going to be around a while and let's play for not just the short term but for the long term and i'm sure i'm not sure we always think that, through in our foreign policy or military decisions and and other business decisions as well, you know the President has been looking at the crop of candidates whowant to challenge him secretary and saying that they don't have a chance even referring to joe biden, i'm you know sleepy java, whatever he calls them, but but that it's not it's not going to be a threat. Given its stewardship of an improving economy, strong markets, strong defense, that in this environment, it's going to be impossible to take him out normally, history shows that, if you're overseeing an economy that strong or markets this resilient, you do get reelected, but he is in a battle. What are you making it? Well, first, we have a year and a half to go before the election. Is there anyone out there that thinks not much is going to happenin the next year and a half that's going to affect that election. Oh there's going to be plenty to happen, both good and bad, and some of them may be disastrous over the next year and a half it will affect the presidential outcome and the congressional outcome in november of next year. That'S where i start. Second, we've got months and months to go before the democrats even get close to deciding who their candidate is.

Do you think it's going to be biden? No, i i think it's just too early to tell i think joe biden has a lane kind of by himself. I think he's is a good spot, but what's going to happen ii, don't know, i can tell you this and all the elections that i've watched and participated in over the years. No two elections are ever the same. 2016 is different. It was very different for all reasons. We know i mean everybody laughed at trump. Nobody said he could be elected and and he's presidents today, 2020 is a different gon na be a different environment totally than 2016. How that all starts to cut and where that goes, and if i was president trump, i wouldn't be too sanguine about this economy being the same and and being where we are today, where we're gon na be in a year and a half, i don't know if He continues todown the track that he's been on on on tariffs and trade, wars and threats, and demeaning our partnerships and alliances and friendships and nato. I don't know how that's gon na cut you're, seeing the republican senate get their backup for the first time in two-and-a-half years on, it's not the same republican party right and i'm no publican. You know, but dna yourself i mean. Are you worried that george will is right, then that the republican party is, of course no fan of the president, so we're just putting that in context that the republican party has become more of a cult? Well, i think we'll make some very good points. I read.

I hadn't read all ofhis book. I'Ve read somewhat. I read the columns, i mean, for example, when i first became a republican, i'm still a republican, i'm not sure what that means. Today we were a party of international engagement, fiscal responsibility and free trade. I don't think you can apply those three to the republican party today matter of fact, just the opposite, so you're right, that's a good point. It'S a different republican party and by the way, looping this back to world war. Two, i saw the congress of the united states dramatically changed when the world war two generation left the stage. When i got to the senate, i was fortunate enough to be able to work with alot of world war, two veterans, their stature, their common sense. Their judgment always prevailed and from stopping a lot of dumb things in both the democrat and republican parties once they left, there was no anchor we kind of came loose of our moorings, especially a republican party. Did i think, and so i think your points, a very good one - i don't know how all this plays out over the next few years. I don't know again what the republican party is. It'S not the party that i once served in in the united states senate secretary.

I'Ve really enjoyed talking to you, i'm glad we have the opportunity i'm gon na. Thank you very much. Thank you.


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