[Transcript] – KARL: I’m joined now exclusively by Treasury Secretary Scott Bessent, who is just back from Davos and joins us here in the studio.
Thank you for being here, Mr. Secretary. Let me start with the threat that the president made just yesterday to Canada. He said, if Canada makes a deal with China, it will immediately be hit with a one hundred percent tariffs against all Canadian goods. Why is Donald Trump threatening Canada again with another trade war?
SCOTT BESSENT, (R) UNITED STATES TREASURY SECRETARY: Well, Jonathan, good to be with you. And look, Prime Minister Carney went to — went to China, came back, dropped some industry specific tariffs on Chinese goods, and we have a highly integrated market with Canada, sometimes in autos, which he dropped the E.V. tariff, I believe, from a hundred percent to six percent.
The goods can cross across the border during the manufacturing process six times. And we can’t let Canada become an opening that the Chinese pour their cheap goods into the U.S. We have a USMCA agreement, but based on — based on that, which is going to be renegotiated this summer, and I’m not sure what Prime Minister Carney is doing here, other than trying to virtue-signal to his globalist friends at Davos.
I don’t think he’s doing the best job for the Canadian people.
KARL: But there’s confusion from President Trump on this. I mean, we heard from him just — I think it was nine days ago, eight or nine days ago. He had this to say about Canada negotiating with China.
(BEGIN VIDEO CLIP)
REPORTER: How do you see the deals — Canada and China just signed trade deals between the two partners?
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, that’s OK. That’s what he should be doing. I mean, it’s a good thing for him to sign a trade deal. If you can get a deal with China, he should do that.
(END VIDEO CLIP)
KARL: OK. So, he gives a green light to a deal with China just after they do it. And then nine days later, he’s saying that’s it, hundred percent tariffs.
BESSENT: Well, no, there’s possibility of hundred percent tariffs if they do a free trade deal. So, what —
KARL: So, it’s not now? It’s — this is if they go further than what’s already happening?
BESSENT: Well, it’s — if they go further, if we see that the Canadians are allowing the Chinese to dump goods. And Jonathan, just to be clear that the Canadians, a few months ago, joined the U.S. in putting high steel tariffs on China because the Chinese are dumping. The Europeans also have done the same thing. And it looks like that Prime Minister Carney may have done some kind of about-face.
KARL: You’ve got tariffs that have been in place since April. And the idea is to bring back manufacturing jobs, but in fact, every month, according to the data from the Fed, every month since April, we’ve actually had a decline in manufacturing jobs in the country.
BESSENT: Well, that — those are the manufacturing jobs. What we’re seeing is a burst in construction jobs because we’re seeing record number of factories construction. I was just in my home state of South Carolina a couple of months ago. There’s a rare earth magnets factory, 800 construction jobs. It could morph into 3,000 factory jobs.
I was just at the Boeing plant in Charleston. Thanks to President Trump’s constant push during the trade deals to sell more aircraft, Boeing is expanding their capacity there by fifty percent. So those will be construction jobs that morph into factory jobs. So, I could not be more upbeat about the prospects for manufacturing, for the economy in 2026.
KARL: And how do you explain what happened with Greenland? I mean, the president goes into Davos, not ruling out military force, talking about imposing tariffs on the Europeans who oppose us retaking Greenland. And now, suddenly, he’s OK with essentially, it seems like the same agreement that’s been in place since the ’50s.
BESSENT: Well, I think you haven’t seen the full agreement. Secretary General, Mark Rutte was a very good interlocutor between the Europeans and between President Trump. But look, a lot — a lot of things have changed up in Greenland. Jonathan, do you know what the Istanbul Bridge is?
KARL: Tell me.
BESSENT: A Chinese freight ship that, for the first time in October, came across the Arctic into the U.K. They are shortening their travel time. So, the Arctic is changing. Very important strategically for the U.S. to help control that.
KARL: OK. But again, it seems like we’re going to basically have the — I mean, Greenland’s not going to become part of the United States. We’re going to have the same access that we’ve had.
(CROSSTALK)
BESSENT: I promise you, the deal is not what we had before.
KARL: OK.
BESSENT: It is much more fulsome for the United States. And again, Jon, just to be clear, for 150 years, American presidents have had their eye on Greenland. We administered Greenland during World War II after the Danish were invaded by the Nazis.
KARL: Let me — let me ask you. Let me show you a photo that was posted by the French Defense Ministry yesterday showing coffins of French soldiers who died fighting alongside Americans in Afghanistan. And we also heard from the Italian prime minister, a good supporter of Donald Trump, Prime Minister Meloni, reacted to what the president had to say about European troops serving in Afghanistan, saying that she was astonished, and noted that 53 Italian service members were killed, more than 700 were wounded.
Does the president regret what he said about our NATO allies and their service in Afghanistan?
BESSENT: Jon, I was traveling. I haven’t seen any of that, but I can tell you that the president values NATO, and since his first term, he has worked hard to make sure that our NATO allies are pulling their fair share.
Just to be clear, since 1980, since 1980, the U.S. has spent $22 trillion more on defense than NATO. And now by President Trump getting our NATO allies, including Canada, who was very deficient in the funding, NATO is going to be stronger than ever.
KARL: But this is about sacrifice. Let’s play President Trump’s words so you understand exactly what they were talking about, what I’m talking about.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We’ve never needed them. We have never really asked anything of them. You know, they’ll say they sent some troops to Afghanistan or this or that, and they did. They stayed a little back little off the front lines.
(END VIDEO CLIP)
KARL: I mean, do you understand why our European allies, the ones you’re negotiating with, are insulted by that?
BESSENT: Again, I think President Trump is laser-focused on the strongest NATO possible, that he has worked to negotiate a settlement on Russia-Ukraine. The U.S. has made much bigger sacrifices than the European has — Europeans have. We have put 25 percent tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India.
They — and just to be clear again, the Russian oil goes into India. The refined products come out, and the Europeans buy the refined products. They are financing the war against themselves. So, President Trump’s leadership, we will eventually end this Ukraine-Russia war.
KARL: And before you go, I know this is not your lane, but I got to ask you about what’s happened in Minneapolis. As a member of the — of the Trump cabinet, are you concerned to see another American citizen ends up dead, shot by federal law enforcement?
BESSENT: Jonathan, it’s a tragedy when anyone dies, but I can tell you the situation on the ground there is being stirred up by Governor Walz. I was out there two weeks ago. Governor Walz declined to provide a security detail for me to go into the Minnesota capital with the state police. So, he is fomenting the — he is fomenting chaos because there is substantial waste, fraud and abuse.
My job as Treasury secretary is to investigate that, and I think that, you know, this chaos that’s going on out there, and again, I am sorry that this gentleman is dead, but he did bring a nine-millimeter semi-automatic weapon with two cartridges to what was supposed to be a peaceful protest. I think that there are a lot of paid agitators who are ginning things up, and the governor has not done a good job of tamping this down.
KARL: Yes. I mean, as you know, he was an ICU nurse, worked for the Veterans Administration, and there’s no evidence that he brandished the gun whatsoever. In fact, it appears that —
BESSENT: He brought a gun.
(CROSSTALK)
KARL: He’d been disarmed before he was —
(CROSSTALK)
BESSENT: He brought a gun. Have you ever gone to a protest, Jonathan?
KARL: I mean, we do have a Second Amendment in this country that —
BESSENT: Jonathan, have you ever gone to a protest?
KARL: I mean —
BESSENT: Have you gone to a protest?
KARL: I mean, I’ve — no, actually, as a reporter covering it.
BESSENT: OK. I’ve been to a protest.
KARL: Yes.
BESSENT: Guess what? I didn’t bring a gun. I brought a billboard.
KARL: OK. Secretary Bessent, thank you for joining us.
Coming up, we’ll have the latest on the massive winter storm sweeping the country. We’re back in a moment.
[END TRANSCRIPT]
