>>> HELLO, EVERYONE, AND WELCOME TO "AMANPOUR AND COMPANY."

HERE'S WHAT IS COMING UP.

SO WHIPLASH AROUND THE WORLD.

WILL ECONOMIC CHAOS CHIP AWAY AT TRUMP'S SUPPORT?

THE FORMER GOVERNOR OF NEW HAMPSHIRE, CHRIS SUNUNU.

>>> THEN, A CHECKUP ON AMERICA, PRIZE-WINNING WRITER ED YOUNG TELLS US WHAT WE CAN LEARN FROM THE ANIMAL KINGDOM.

>>> ALSO, THE CASE FOR TRUMP'S TARIFFS, THE CONCERNED ECONOMISTS.

>>> PLUS, "FLOW" --THE OSCAR- WINNING ANIMAL FILM TOUCHING HEARTS EVERYWHERE.

I TALK TO THE DIRECTOR OF THIS WORDLESS MASTERPIECE.

>>> "AMANPOUR AND COMPANY" IS MADE POSSIBLE BY THE ANDERSON FAMILY ENDOWMENT, JIM ATTWOOD AND LESLIE WILLIAMS, CANDACE KING WEIR, THE SYLVIA A.

AND SIMON B. POYTA PROGRAMMING ENDOWMENT TO FIGHT ANTISEMITISM, THE FAMILY FOUNDATION OF LEILA AND MICKEY STRAUS, MARK J. BLECHNER, THE FILOMEN M. D'AGOSTINO FOUNDATION, SETON J. MELVIN, THE PETER G. PETERSON AND JOAN GANZ COONEY FUND, CHARLES ROSENBLUM, KOO AND PATRICIA YUEN, COMMITTED TO BRIDGING CULTURAL DIFFERENCES IN OUR COMMUNITIES, BARBARA HOPE ZUCKERBERG, AND JEFFREY KATZ AND BETH ROGERS, AND BY CONTRIBUTIONS TO YOUR PBS STATION, FROM VIEWERS LIKE YOU.

THANK YOU!

>>> WELCOME TO THE PROGRAM.

I AM CHRISTIANE AMANPOUR IN LONDON.

DONALD TRUMP HAS TAKEN THE GLOBAL ECONOMY ON A DANGEROUS ROLLER COASTER AND IT IS NOT OVER, YET.

U.S. PRESIDENT APPEARED SPOOKED BY THE FEARS OF THE MARKET, AND STEPPED BACK FROM HIS SWEEPING TARIFFS PLAN.

WHILE, AT THE SAME TIME, DOUBLING DOWN AGAINST CHINA.

ECONOMISTS ARE URGING AMERICANS TO REALIZE THAT A SERIOUS TERRORIST -- TARIFFS REGIME REMAINS IN PLACE, AND COULD HAVE DEVASTATING IMPACTS TO EVERYONE'S WALLET.

DEMOCRATS ARE ANGRY ABOUT THE DAMAGE BEING DONE TO ORDINARY CITIZENS AND THE AMERICAN BRAND.

AND EVEN SOME REPUBLICANS ARE TAKING ISSUE WITH THE SEEMINGLY INCOHERENT MESSAGING FROM THE WHITE HOUSE.

CHRIS SUNUNU WAS THE REPUBLICAN GOVERNOR OF NEW HAMPSHIRE.

HE WAS A BACKER OF NIKKI HALEY DURING THE CAMPAIGN, BUT ULTIMATELY ENDORSED DONALD TRUMP.

HE HAS JUST RULED OUT A SENATE RUN FOR HIMSELF, IN THE COMPETITIVE STATE OF NEW HAMPSHIRE, MUCH TO THE PRESIDENTS DISAPPOINTMENT.

BUT, HE IS JOINING US, FROM NEW YORK.

SO, WELCOME TO THE PROGRAM.

AND BECAUSE YOU ARE A TRUMP SUPPORTER, I NEED TO ASK YOU, AT LEAST IN THE IMPLEMENTATION, AND IN THE MESSAGING, THAT HAS SET THE WORLD LITERALLY, AS I DESCRIBED, A ROLLING EARTHQUAKE FOR THE LAST WEEK?

>> SURE.

LOOK, IT'S A GREAT QUESTION.

A LOT OF FOLKS CONTACTING ME AND WE WERE TALKING EARLIER, ESPECIALLY OVERSEAS, CAN YOU HELP US DECODE A LITTLE BIT WHAT IS HAPPENING, HERE?

AGAIN, WE KNOW PRESIDENT TRUMP IS NEGOTIATING STRATEGY IS ABOUT STRENGTH AND UNCERTAINTY AND HE HAS THIS COLOSSAL MIXTURE OF THOSE TWO THINGS THAT HE TRIES TO USE TO HIS ADVANTAGE.

THERE IS A LOT OF UNCERTAINTY.

I THINK WHAT HAS HAPPENED HERE, HE SAID, "LOOK, WE WANT TO RENEGOTIATE OUR INTERNATIONAL DEALS."

NOT JUST THE TARIFFS, BUT THOSE OTHER TAXES AND REGULATIONS THAT COME INTO PLAY.

SO, HE HAD HIS GRAND PLAN OF TARIFFS THAT CAME IN.

A COUPLE THINGS HAPPENED.

NUMBER ONE, THE STOCK MARKET DIPPED --AND THEY KNEW IT WOULD DIP, BUT IT FELL MUCH HARDER THAN I THOUGHT.

12% DEPENDING ON WHAT INDEXES YOU ARE LOOKING AT.

AT THE SAME TIME, YOU HAD COUNTRIES COMING IN IN DROVES, NOT JUST A COUPLE, BUT ACCORDING TO THEM, 75 COUNTRIES THAT HAVE CONTACTED THE STATE DEPARTMENT TO SAY, LOOK, WE ARE WILLING TO RENEGOTIATE THIS THING, LET'S FIND A WAY OUT.

SO, THOSE TWO, THE POSITIVE AND THE NEGATIVE ON THAT KIND OF CAME TOGETHER WERE OBVIOUSLY HE MADE A BIT OF A --I WOULDN'T CALL IT A REVERSAL --BUT A NEW STRATEGY AND DECISION AND SAID, WELL, WE ARE GOING TO POUND ON CHINA, THEY CLEARLY DON'T WANT TO COME TO THE TABLE, THEY CLEARLY ARE BEING STUBBORN, BUT YOU GUYS ARE PARTNERS, YOU GUYS ARE FRIENDS AROUND THE WORLD.

WE ARE HAPPY TO DO THIS, AND LET'S GIVE OURSELVES 90 DAYS, A 90 DAY REPRIEVE AND SEE HOW WE CAN ALL STRIKE A BETTER DEAL.

AND THERE ARE DEALS THAT HAVEN'T BEEN RENEGOTIATED AND REALLY LOOKED INTO, FOR DECADES, FOR SOME OF THESE COUNTRIES.

IT IS A GREAT OPPORTUNITY FOR AMERICA, BUT THEY HAVE TO CLOSE THESE DEALS.

>> SO, GOVERNOR SUNUNU, YOU ARE PUTTING A GOOD SPIN ON IT, AND WE ARE TALKING ABOUT THE REACTION TO THE REACTION, AND THE MARKETS DID NOT DIP, THEY TANKED.

TO YOUR POINT, I WANT TO READ FROM STEPHEN MILLER, WHO IS THE WHO POSTED --I MEAN --HE SAID, "YOU HAVE BEEN WATCHING THE GREATEST ECONOMIC MASTER STRATEGY FROM AN AMERICAN PRESIDENT IN HISTORY."

I MEAN, SERIOUSLY, ARE THEY MAKING FUN OF US?

A LOT OF AMERICAN COMMENTATORS ARE SAYING --INCLUDING DAVID SANGER IN THE NEW YORK TIMES -- THIS HAS BEEN AN EXPERIMENT IN RECKLESSNESS.

NO MATTER WHICH WAY YOU CUT IT, NO MATTER WHAT YOU WANT TO ACHIEVE.

THE MATH AND THE METHODOLOGY WAS ALL OVER THE PLACE AND DID NOT ADD UP.

>> SO, I AGREE WITH THE MATH, BECAUSE I THINK A LOT OF FOLKS AGREE THAT THAT FORMULA WAS A BIT ODD.

THEY WERE PUTTING TARIFFS ON PLACES THAT WERE ONLY INHABITED BY PENGUINS, THAT LOOKED A LITTLE WEIRD.

SO, I JUST DON'T THINK THERE WAS A LOT OF DOUBLE CHECKING, IF YOU WILL, WHAT THE "MATH" WAS.

BUT, AT THE END OF THE DAY, THESE ARE ALL COUNTRIES THAT WE ALL AGREE --AT LEAST HERE IN THE UNITED STATES --COULD USE A RENEGOTIATION OF WHAT THAT STRATEGY IS.

NOW, WHAT IS THE NET RESULT?

IS THIS A MASTER CLASS, LIKE SOME SAY IT COMPLETE DEBACLE?

WE WILL FIND OUT.

WE ARE LESS THAN A WEEKEND -- AS I SAID, I APPRECIATE THEY ARE GIVING THEMSELVES 90 DAYS, NOT A YEAR, TWO YEARS.

THEY HAVE 90 DAYS.

AND IF THEY CAN'T RENEGOTIATE SOME OF THESE DEALS WITH A NET 90 DAYS --AND I WOULDN'T EVEN SAY SOME, THEY HAVE TO RENEGOTIATE A LOT OF THEM TO JUSTIFY THAT "WORKED."

BECAUSE IF NOT, WE ARE RIGHT BACK WHERE WE STARTED 90 DAYS FROM NOW, THE MARKET WILL PROBABLY TANK EVEN HARDER THAN IT DID BEFORE.

I THINK THEY KNOW THAT.

SO, THEY HAVE A LOT --THEY HAVE GIVEN THEMSELVES A BOUNDARY WITH A HECK OF A LOT OF WORK TO ACHIEVE THOSE RESULTS.

AND I THINK WHAT YOU WILL SEE, IS ULTIMATELY, CHINA HANGING OUT THERE ON THEIR OWN.

THAT IS THE REAL INTERESTING ONE, HERE.

RIGHT?

AND I APPRECIATE WHAT TRUMP SAID, IN TERMS --HE SAID, HE RESPECTS XI, HE KNOWS HE CAN BE STUBBORN AND THERE IS A LOT OF PRIDE, THERE.

TREATING IT MORE OF A CULTURAL ISSUE, THAT THE PRESIDENT IS ACKNOWLEDGING NEEDS TO BE KIND OF WORKED AROUND.

BUT, HE IS NOT GOING TO BED.

IF IT TAKES A HARD-LINE TRADE WAR WITH CHINA, GOOD LUCK, OUTLASTING TRUMP ON THAT ONE.

SO, MY SENSE IS, EVERYONE IS GOING TO SEE WHERE SOME OF THESE COUNTRIES COME IN, IF THESE DEALS GET NEGOTIATED.

THAT, IN ITSELF, PUTS MORE PRESSURE ON CHINA.

YOU WILL SEE VIETNAM --THAT IS AN INTERESTING ONE, RIGHT?

INDIA, MAYBE JAPAN.

THESE FOLKS WILL PROBABLY BE THE FIRST FOLKS AT THE TABLE TO WANT TO RENEGOTIATE THEIR DEALS, WHICH PUTS EVEN MORE PRESSURE ON CHINA, AS IT ALL DEVELOPS OVER THE NEXT THREE MONTHS.

>> YOU KNOW, VIETNAM IS A BIT OF A WEIRD ONE, BECAUSE IT DOESN'T HAVE TARIFFS, AND IT WAS HIT WITH A MASSIVE 96%, WHICH HE GENEROUSLY HAVE TO 47%, OR WHATEVER IT WAS.

AND I THOUGHT, YOU KNOW, HAVING VIETNAM SELL TO AMERICA WAS PART OF THE OVERALL STRATEGY OF PIVOTING AWAY FROM CHINA.

AND NOW, THEY GET HAMMERED.

SO, AGAIN, IT'S REALLY DIFFICULT TO UNDERSTAND.

NOW, YOU SAY "GOOD LUCK, OUTLASTING TRUMP."

BUT, CLEARLY, CAN HE OUTLAST BOND MARKETS?

I THINK THAT IS WHAT --AND I AM NOT EVEN AN EXPERT ON ANYTHING ECONOMIC OR MARKET WISE --BUT, THE BONDS ARE MEANT TO BE SAFE, AND SECURE.

AND WHEN THEY STARTED TO SHOW, SOMETHING OPPOSITE, THAT IS TO, YOU KNOW, GATHER THE WAGON, SO TO SPEAK.

>> YEAH, WITHOUT A DOUBT, I THINK THE BOND MARKET, EVEN MORE THAN THE STOCK MARKET, IS WHAT REALLY SHOOK THEM.

JUST GOING BACK TO VIETNAM -- BECAUSE I THINK THAT WILL BE A STORY AS WE GO FORWARD --TO YOUR POINT, THEY DIDN'T HAVE TARIFFS, BUT THEY HAD ALL THE CHINESE COMPANIES COMING IN AND USING VIETNAM AS A GATEWAY.

I THINK THE APPROACH TO VIETNAM WILL BE, BELIEVE IT OR NOT, SIMILAR TO PANAMA.

>> ARE THEY GOING TO AN EXIT -- ANNEX IT?

>> NO, BECAUSE THEY CUT A NEW DEAL.

THE TRUMP ADMINISTRATION GOT TOGETHER THEY SAID, WE ARE NOT GOING TO LET CHINA DO THE BELT AND ROW TYPE OF STUFF, WE ARE NOT GOING TO ADHERE TO THOSE 2017 DEALS AND LET THEM BUY UP OUR PORTS AND THOSE SORTS OF THINGS AND HAVE CONTROL OVER THE CANAL.

PANAMA NEW BEING A FRIEND AND ALLY TO AMERICA OVER THE CHINESE WAS MORE IMPORTANT, AND I THAT WILL BE THE APPROACH WITH VIETNAM.

UNDERSTANDING THAT, LOOK, YOU CAN'T JUST LET THE CHINESE PUT THEIR COMPANIES IN YOUR COUNTRY TO THEN USE THE GOOD TARIFFS DEALS, THE GOOD TARIFFS AND WE HAVE.

THAT IS A BACK DOOR, THAT IS A LOOPHOLE.

RIGHT?

SO, WE JUST NEED TO CLOSE THAT LOOPHOLE.

AND AGAIN, IT WON'T JUST BE ABOUT THE TARIFF NUMBER.

IT WILL BE ABOUT THE OTHER RULES, REGULATIONS, BARRIERS, AND OPPORTUNITIES THAT THEY CREATE OR DON'T CREATE FOR THE CHINESE, IN TERMS OF IMPORTING THOSE GOODS.

>> YOU ARE A RETAIL POLITICIAN.

I SAID THAT YOU ARE NOT GOING TO RUN FOR SENATE, AS TRUMP WANTED YOU TO.

BUT, YOU KNOW WHAT IT TAKES, TO WIN VOTES.

YOU HAVE SEEN ANGER IN VARIOUS REPUBLICAN TOWN HALLS, AND OTHER TOWN HALLS.

YOU HAVE SEEN PROTESTS, NOW.

AND WE HAVE SEEN, FROM THE YALE LAB, WHO SAID THAT THESE --THE CURRENT DAMAGE THAT HAS BEEN DONE, INCLUDING THE 10% THAT REMAINS ON TARIFFS AROUND THE WORLD --IS GOING TO COST THE AVERAGE AMERICAN SOMEWHERE IN THE REGION OF $3.5 THOUSAND MORE, PER MONTH, IN THE POCKET, TO BE SPENDING.

THAT THE IDEA OF INFLATION, AND JOBLESSNESS --PER YEAR, IS WHAT I MEANT, SORRY, NOT PER MONTH, A YEAR --NONETHELESS, THIS IS NOT WHY PEOPLE ELECTED DONALD TRUMP.

HE DIDN'T TELL THEM THE PRICES.

HE STARTED SAYING, AFTERWARDS, AFTER THE INAUGURATION, THAT THEY MIGHT HAVE TO BEAR SOME PAIN.

BUT, HE NEVER TOLD THEM THAT, AT THE BEGINNING, YOU KNOW, DURING THE CAMPAIGN.

IS THIS --AGAIN, HOW IS THIS GOING TO PLAY OUT?

>> YEAH, SO, AGAIN, I THINK WHAT YOU'RE GOING TO SEE, THE TARIFF DEAL IS TOUGH, IN THAT NO DOUBT, IT IS GOING TO CREATE SOME, HOPEFULLY, SHORT-TERM PAIN.

BUT, THAT GETS OFFSET, ALL OF THE RULES AND REGULATIONS THEY ARE TAKING OFF THE BOOKS, ALL THE MONEY THEY ARE BRINGING IN, THE OUTSIDE INVESTMENT IN THIS COUNTRY RIGHT NOW IS IN THE HUNDREDS OF BILLIONS OF DOLLARS, WHERE IT WASN'T BEFORE.

SPECIFICALLY AROUND NATURAL GAS AND ENERGY, WHICH IS A DRIVER ON INFLATIONARY COSTS WITH A LOT OF THOSE REGULATIONS.

THE TARIFFS, IF THEY HAD STAYED ON, YOU KNOW WHAT THAT REALLY CRUSHES?

THAT CRUSHES CORPORATE PROFITS MORE THAN ANYTHING ELSE.

SO, BY HAVING A TAX-CUT DEAL THAT COMES IN, RELEASING THESE TARIFFS FOR AT LEAST 90 DAYS, HE IS TELLING CORPORATE AMERICA, INVEST THAT MONEY INTO YOUR INFO STRUCTURE, BUILD OUT THE INFO STRUCTURE FOR STEEL AND ALUMINUM.

WE ARE PLAYING THAT LONGING FOR GOOD, AMERICAN MANUFACTURING JOBS SO WE ARE NOT JUST A SERVICE COUNTRY THAT DEALS IN INFORMATION.

WE HAVE TO BE BIGGER THAN THAT.

WE HAVE TO MAKE OUR OWN WIDGETS.

WE DON'T HAVE TO MAKE EVERY WIDGET FOR THE WORLD, BUT WE HAVE TO MAKE OUR OWN WIDGETS AND WHEN WE BUY THEM FOR THE REST OF THE WORLD, WE HAVE TO BE TREATED FAIRLY.

THIS IS A MASTER TRANSITION.

THE BEST THING ABOUT TRUMP IN TERMS OF THE MEDIA, BOY, THAT GUY IS FULL OF CONTENT, EVERY DAY HE'S DOING SOMETHING, WHICH IS SUCH A JUST JUXTAPOSITION TO THE PREVIOUS OF MINISTRATION WHO WOULDN'T EVEN ANSWER QUESTIONS, FOR DAYS ON END.

TRUMP IS OUT THERE EVERY DAY DOING SOMETHING DIFFERENT, WHETHER YOU LIKE IT OR NOT AND WE CAN DEBATE THAT ALL DAY LONG, SOME THINGS ARE GOOD, SOME THINGS ARE BAD.

SO, HE IS DRIVING FORWARD ON THIS STUFF QUICKLY, DRIVING FORWARD ON IT HARD TO GET THE TOUGH STUFF, THAT TRANSITIONAL STUFF OVER WITH, QUICKLY.

AND, HOPEFULLY, BUILD THAT LONG- TERM BENEFIT SO IT HAS A MINIMUM IMPACT ON THE ELECTIONS AND A MINIMUM IMPACT, HOPEFULLY, FOR THE LONG-TERM.

NOW, YOU MIGHT BE RIGHT ABOUT THE RACE.

RESERVE, IF HE WANTS TO HELP STABILIZE THAT BOND MARKET.

>> OKAY, SO, YOU BOUGHT UP THE GENERAL RESERVE.

JANET YELLEN, THE FORMER CHAIRWOMAN TOLD CNN TODAY THAT TRUMP ACTUALLY HAS TAKEN A WRECKING BALL TO AN ECONOMY HE INHERITED, WHICH WAS IN GOOD SHAPE.

HERE, IT WAS CALLED THE ENVY OF THE WORLD BY THE ECONOMIST, BY THE FT, ALL THE REST OF IT.

THIS IS WHAT SENATOR BERNIE SANDERS --WHO OBVIOUSLY CARES A LOT ABOUT, YOU KNOW, INDIVIDUAL PEOPLE, NOT THE WEALTHY --AND THIS IS WHAT HE TOLD CNN IN A TOWN HALL.

>> WHAT I DO KNOW, IS THE IMMEDIATE HARM IS GOING TO BE VERY SIGNIFICANT, AND IT IS GOING TO --I WAS JUST IN TARGET THE OTHER DAY, BUYING SOMETHING, AND I WAS LOOKING AROUND, AND VIRTUALLY, ALL THOSE PARTS SOLD IN STORES LIKE TARGET, ARE GOING TO SEE SIGNIFICANT INCREASES OF PRICES, IF TRUMP GETS HIS WAY WITH TARIFFS, THAT WILL HURT WORKING PEOPLE A WHOLE LOT.

>> AND AGAIN, I SORT OF ASKED YOU THIS ALREADY, BUT HOW IS HE GOING TO ANSWER THOSE PEOPLE WHO VOTED FOR HIM, FOR THE PRICE OF EGGS, ESSENTIALLY?

>> SO, A COUPLE THINGS.

FIRST, JANET YELLEN IS THE SAME -- SECRETARY OF THE TREASURY THAT SAID INFLATION WAS TEMPORARY AND WASN'T GOING TO BE A BIG DEAL.

SO, WITH ALL DUE RESPECT TO JANET YELLEN, SHE WAS AN ABSOLUTE FOOL WHEN IT CAME TO THE ECONOMY.

BERNIE SANDERS IS THE MOST LEFT- WING, PROGRESSIVE, ANTI-TRUMP PERSON YOU ARE GOING TO FIND IN THE COUNTRY THAT IS OFF DOING NOT JUST TOWN HALLS, BUT TOURS ACROSS THE COUNTRY, DROPPING A WOKE, PROGRESSIVE MESSAGE THAT LOST THEM THE ELECTION IN '24.

SO, IF THOSE ARE THE TWO INDIVIDUALS THAT ARE BEING HELD UP AS A "BOY, WE REALLY HAVE TO ANSWER TO THESE GUYS," ABSOLUTELY NOT.

WHY WOULD MORE WORKING-CLASS AMERICANS SUPPORT DONALD TRUMP, THEN REALLY EVER BEFORE, IN THE REPUBLICAN PARTY IN 2024?

BECAUSE THEY HAD BEEN KIND OF HOODWINKED, IF YOU WILL, BY THE LEFT.

SOMETHING HAS TO CHANGE.

HE WAS HIRED AS A DISRUPTOR.

YOU CANNOT DISRUPT WITHOUT BREAKING A FEW EGGS.

YOU CANNOT DISRUPT WITHOUT HAVING SOME UNCERTAINTY IN THE SYSTEM.

HE IS DRAINING THE SWAMP.

HE IS DECENTRALIZING GOVERNMENT.

HE IS GETTING RID OF OLD BUREAUCRACIES, AND FRAUD, AND WASTE, NOT JUST A FEW MILLION OR FEW BILLION, WE ARE TALKING HUNDREDS OF BILLIONS OF HE IS BREAKING IN AND BREAKING DOWN A SYSTEM THAT HAS NOT WORKED.

NOBODY THINGS WASHINGTON HAS WORKED.

NOBODY!

RIGHT?

AND HE WAS FINALLY HIRED TO COME AND CHANGE IT, SO I'M NOT BEING AN OVERLY DEFENDER OF EVERY POLICY HE HAS, BUT UNDERSTAND, THOSE FOLKS WHO VOTED FOR HIM VOTED FOR HIM TO COME IN AND BREAK A FEW EGGS.

>> HE BASICALLY WROTE -- DISTRACT, YES.

BUT, WE ALSO TALKED ABOUT, YOU HAVE TO DISRUPT AND PUT SOMETHING IN HER PLACE AND SHE DOESN'T HAVE ANYTHING TO PUT IN ITS PLACE, AND THAT IS AN ISSUE.

IT HAS NOT HAPPENED, THEY HAVEN'T GOT A PLAN B.

WE ARE JUST WAITING AND SEEING, AS YOU SAID, WHAT IS GOING TO HAPPEN IN THE NEXT 90 DAYS.

BUT, YOU KNOW, WHEN HE EXPLAINED THE PAUSE, THE 90 DAY PAUSE, HE ESSENTIALLY WROTE THIS THING AND PUT IT ON, YOU KNOW, SOCIAL TRUTH MEDIA, WHATEVER IT IS CALLED, TRUTH SOCIAL, THAT, YOU KNOW, WE WROTE THIS, WE WROTE IT FROM THE HEART.

YOU KNOW, WE THOUGHT WE WERE GOING TO DO THIS PAUSE, BUT THEN WE SAW THIS, AND THAT, AND WE HAVE REALLY WRITTEN FROM THE HEART.

I MEAN, DOES THAT SATISFY YOU?

IS THIS THE KIND OF GOVERNMENT RESPONSE THAT YOU WANT TO SEE?

>> HE IS VERY --LOOK, HE VERY MUCH BELIEVES IN WHAT HE IS DOING.

HE IS NOT TAKING A PAGE OUT OF SOME OTHER REPUBLICAN NATIONAL PLAYBOOK, OR SOMETHING LIKE THAT.

HE'S VERY PASSIONATE.

HE BELIEVES IN --AND AGAIN, I DON'T AGREE WITH EVERYTHING HE IS DOING, BUT I WILL TELL YOU, HE DOES, ALL RIGHT?

SO, LET'S GIVE HIM SOME CREDIT, THERE.

AND HE DOESN'T JUST DO IT, HE DOESN'T TRY TO WALK PAST IT, HE ANSWERS QUESTIONS AND DOES PRESS CONFERENCES ON ALL OF IT, SO, I GET THE DOWNSIDE OF SOME OF THIS.

BUT, LET'S JUST HAVE SOME APPRECIATION FOR A PRESIDENT THAT IS ACTUALLY OUT THERE.

THERE IS NO QUESTION ABOUT WHO IS IN CHARGE.

NOBODY KNEW WHO WAS IN CHARGE FOR FOUR YEARS UNDER BIDEN, AND EVERYBODY KIND OF IGNORED IT AND THE MEDIA SAID "IT'S ALL FINE."

TO THIS DAY, NOBODY CAN TELL US WHO IS REALLY IN CHARGE.

YOU KNOW WHO IS IN CHARGE WITH THIS WHITE HOUSE AND HE STANDS BEHIND WHAT HE DOES AND HE HAS A TEAM THAT IS TRYING TO SUPPORT THAT AGENDA.

IT IS HARD WHEN HE IS OVER HERE, HE IS OVER THERE, THERE IS A BIT OF THAT UNCERTAINTY.

THAT IS NOT COMPLETELY ON DESIGN.

EVERYBODY KNOWS THAT IS KIND OF HOW HE WORKS, AND WHAT HE TRIES TO DO IS PLAY THAT TO HIS ADVANTAGE AS MUCH AS HE CAN, SPECIFICALLY ON THE INTERNATIONAL STAGE.

YOU HAVE WHAT IS HAPPENING IN RUSSIA AND UKRAINE, CLOSER TO PEACE THAN EVER BEFORE.

A WAYS TO GO, BUT STILL CLOSER THAN WE HAVE BEEN, EVER BEFORE.

WHAT IS HAPPENING OVER IN THE MIDDLE EAST, STANDING UP TO IRAN, HITTING THE HOUTHIS, WHICH WORK ATTACKING AMERICANS, FINALLY DOING SOMETHING ABOUT IT.

WE TALK ABOUT THE BORDER, SECURING THE BORDER.

WE HEARD FOR FOUR YEARS, FROM DEMOCRATS, "WE CAN'T SECURE THE BORDER, IT'S NOT POSSIBLE."

ACTUALLY, IT WAS.

IT WAS POSSIBLE TO DO ON DAY ONE AND HE DID IT, SO LET'S GIVE THE PRESIDENT SOME CREDIT ON IT.

SO, I'M NOT TRYING TO SUGARCOAT EVERYTHING, BUT I AM SAYING, LET'S UNDERSTAND THERE IS SOME GOOD HERE, WITH THE BAD.

HE IS --I DO LIKE THAT HE GETS HIMSELF TIMELINES.

EVEN ON DOGE, PRESIDENT TRUMP HE SAID, PRESIDENT TRUMP SEVEN IS GOING TO LAST FOR 18 MONTHS, TOPS.

THAT'S IT.

THEY ONLY HAVE 18 MONTHS TO DO THEIR JOB.

I LOVE THAT IDEA.

PUT THEM IN A BOX, YOU DON'T LET BUREAUCRACY GO COMPLETELY UNCHECKED, THEY GET AS MUCH DONE AS THEY POSSIBLY CAN, AND YOU ASK CONGRESS TO FOLLOW IT UP.

SO, THERE IS A PROCESS HERETO ALL OF THIS.

IT IS BEING CHALLENGED IN COURT, I GET IT.

BUT, AT THE END OF THE DAY, HE IS DOING SOMETHING AND THAT IS WHY HE WAS HIRED.

WE HAVE FOUR YEARS ON THE SIDE OF THE POND, OF NOTHING, OF NOT MUCH OF ANYTHING OTHER THAN "WATCH YOUR PRONOUNCE."

AND, LET'S FOCUS ON WOKEISM AND DEI NONSENSE.

THIS GUY IS TRYING TO CREATE MANUFACTURING JOBS.

HE IS TRYING TO ACTUALLY DO IT.

AND WE NEED BETTER DEALS TO GET THERE, THAT'S ALL.

>> OKAY, AND AGAIN, WE WILL WAIT AND SEE BECAUSE MOST ECONOMISTS SAY IT WILL NOT BE POSSIBLE IN THE WAY HE'S DOING IT AND THE PRESIDENT TRUMP SEVEN THING HAS CAUSED MASS PANIC AMONG ALL OF THESE PEOPLE WHO ARE BEING LAID OFF, AND SO MUCH AMERICAN RESEARCH, AND THIS, AND THAT, IS WALKING OUT THE DOOR, AND BEING EXCISED, AT THE RIDGE.

LOOK, MY FINAL QUESTION SAYS, THIS IS WHAT ARBITRARY, ABSOLUTE POWER LOOKS LIKE.

SHE IS, AS YOU KNOW, AN EXPERT, SHE WRITES IN THE ATLANTIC.

AND YOU KNOW --BECAUSE IT WAS TIKTOKED IN THE WASHINGTON POST TODAY, THAT IT TOOK A NUMBER OF PEOPLE, MAYBE, WHO WENT ON "SEAN HANNITY" ON TUESDAY NIGHT, I BELIEVE, AND ESSENTIALLY APPEALED TO TRUMP VIA FOX NEWS.

BECAUSE, I GUESS, THEY COULDN'T --OR, DIDN'T, OR WOULDN'T DARE GO TO APPEAL TO HIM --AS EVERYTHING WAS TANKING, FACE-TO- FACE.

AND HE WAS WATCHING THAT, AND THEY KNEW IT.

THIS IS WHAT WAS WRITTEN DOWN, ANYWAY, AND FOX HAS NOT DISPUTED IT AND THE OTHERS HAVE NOT DISPUTED IT.

THERE IS A PROBLEM, ISN'T IT, WHEN ACTUAL REPUBLICANS FEEL TOO AFRAID TO GO AND TALK TO, AND TELL THE EMPEROR THAT, IN SOME CASES, HE IS NOT WEARING ANY CLOTHES.

>> WELL, I DON'T THINK FOLKS ARE AFRAID.

IF YOU ARE GOING ON "SEAN HANNITY" ON A PRIME TIME SHOW, KNOWING THE PRESIDENT IS WATCHING, I THINK IT IS PRETTY CLEAR WHO IS SAYING IT AND WHAT IS BEING SAID.

SO, NO, I DON'T THINK IT IS FEAR, BUT I THINK THEIR STRATEGY IS A GOOD ONE, IN THAT THEY WANT TO SHOW IT ISN'T ONE SENATOR HERE, AND ONE SENATOR THERE.

WE ARE COMING AS A GROUP, WE ARE COMING WITH A CONSISTENT MESSAGE THAT IS VERY IMPORTANT.

WHAT THEY ARE ALSO ASKING THE WHITE HOUSE IS, YOU NEED BETTER KAROLINE LEAVITT, THE WHITE HOUSE PRESS SECRETARY IS PHENOMENAL, SHE IS REALLY TERRIFIC.

BUT, WITH ALL THE THINGS HAPPENING SO FAST, THE CHAOTIC MESSAGING, ARE WE DOING THIS ON THURSDAY?

ARE WE DOING THAT ON MONDAY?

THE STOCK MARKET IS UP, THE STOCK MARKET IS DOWN, THAT IS REALLY HARD FOR SITTING POLITICIANS TO REALLY OUT TO THEIR CONSTITUENTS, FOR A GOVERNOR OR SENATOR TO SAY, THIS IS WHAT WE THINK IS HAPPENING.

SO, I AM DOING MY BEST TO DECODE IT, AS WELL.

I AM AN ETERNAL OPTIMIST, I REALLY AM.

I LOVE THIS COUNTRY AND I TOOK AMERICA'S STRENGTH IN THE WORLD BRINGS PEACE TO THE WORLD, I'M A BIG BELIEVER IN THAT, SO I AM THE ETERNAL OPTIMIST, HERE.

BUT, YOU HAVE TO LOOK AT IT FROM BOTH SIDES AND LET'S SEE WHERE THIS PLAYS OUT OVER THE NEXT 90 DAYS.

EITHER WAY, IT IS GOING TO BE FUN.

>> OH, NO, IT IS NOT FUN.

IT IS SCARY.

IT IS SCARY.

PEOPLE ARE LOSING THEIR WHATEVER.

IN ANY EVENT, GOVERNOR SUNUNU, THANK YOU VERY MUCH, INDEED.

>>> AND NOW, MEASLES IS BACK, AS WE KNOW, IN THE UNITED STATES.

THE ANTITAX MOVEMENT IS FIRMLY EMBEDDED IN THE HIGHEST LEVELS OF THE GOVERNMENT, AS WE KNOW, TOO.

AND PUBLIC HEALTH AGENCIES AND DISEASE RESEARCH ARE BEING GUTTED.

ALL OF THIS MAKES EXPERTS VERY CONCERNED, THAT AMERICA MAY NOT BE READY FOR ANOTHER PANDEMIC, WHILE ALSO HEMORRHAGING ITS WORLD-CLASS MEDICAL ADVANTAGE.

OUR NEXT GUEST, THE PULITZER PRIZE WINNER, ED YOUNG, WAS AT THE FOREFRONT OF COVERAGE OF THE COVID PANDEMIC, AS A SCIENCE REPORTER FOR THE ATLANTIC.

HE IS ALSO AUTHOR OF A HIGHLY ACCLAIMED, NEW BOOK.

"AN IMMENSE WORLD."

ABOUT THE FASCINATING AND MYSTERIOUS SENSORY WORLD OF ANIMALS.

HE IS RELEASING A VERSION FOR KIDS.

ED YOUNG IS JOINING ME FROM OAKLAND, CALIFORNIA.

ED, WELCOME.

I KNOW IT IS NOT NEW, BUT IT IS NEW THAT YOU ARE RELEASING IT FOR KIDS, AND WE WILL TALK ABOUT IT.

BUT, FIRST -- >> RIGHT.

>> YOU ARE NOT REALLY ON THE FRONTLINE OF HEALTH COVERAGE, ANYMORE.

BUT, HOW MUCH OF IT CONCERNS YOU?

YOU KNOW, PEOPLE SAID THAT THERE WAS A MEASLES PROBLEM, THE GOVERNMENT DIDN'T TAKE IT SERIOUSLY.

ROBERT F KENNEDY, THE SECRETARY OF HHS, HAD ALL THESE CRACKED REMEDIES.

AND NOW, HE IS BEING FORCED TO SAY, "ACTUALLY, TAKE THE VACCINE."

>> YEAH, I THINK IT IS HUGELY CONCERNING.

YOU KNOW, ANYONE WITH EXPERTISE IN HEALTH COULD HAVE SEEN THIS COMING.

WE KNOW THAT THIS INFORMATION ABOUT THE IMPORTANCE OF VACCINES --ESPECIALLY FOR THINGS LIKE MEASLES --HAVE BEEN GROWING FOR SOME TIME, AND IT IS ONLY GOING TO GET WORSE.

YOU KNOW, I AM TALKING TO SOMEONE WHO GOT MEASLES IMMUNITY THE WRONG WAY.

I ACTUALLY GOT MEASLES AS A KID, A COUPLE OF DAYS BEFORE I WAS SCHEDULED TO GET MY MMR VACCINE.

I ENDED UP CRITICALLY ILL, IN THE HOSPITAL AS A RESULT.

THIS IS NOT A DISEASE TO TAKE LIGHTLY, AND WE ACTUALLY HAVE AN INCREDIBLY EFFECTIVE WAY OF CONTROLLING IT THAT IS BEING IGNORED.

I THINK THIS PROBLEM HAS BEEN GOING ON FOR SOME TIME, AND TO ADDRESS IT, WE NEED QUITE HIGH TOUCH PERSONAL MEASURES.

I THINK IT REQUIRES PEOPLE TALKING TO EACH OTHER, TO THEIR NEIGHBORS, TO THEIR COMMUNITY, ABOUT THE THINGS THEY VALUE, IT IS GOING TO BE EVERMORE IMPORTANT, WHEN THE MESSAGING COMING FROM THE TOP OFFICIALS, AT THE TOP AGENCIES, IS COMPLETELY COUNTER TO OUR MEDICAL REALITY.

>> YOU KNOW, AS YOU KNOW -- BETTER THAN I DO, BECAUSE YOU WERE THERE --IT STARTED HERE, IN ENGLAND, FAKE SCIENCE THAT SAID MMR CAUSED AUTISM, WHICH HAS BEEN DEBUNKED, OVER AND OVER AGAIN, BUT SOMEHOW, STILL HAS SOME KIND OF CURRENCY.

YOU KNOW, PEOPLE WHO ARE NATURALLY SUSPICIOUS OF GOVERNMENT, AND BELIEVE IT IS THEIR FREEDOM TO DO WHATEVER THEY WANT, THEY FEEL, YOU KNOW, THAT THEY SHOULD BE ABLE TO DO WHATEVER THEY WANT FOR THEIR FAMILIES.

TWO KIDS DIED IN TEXAS OVER THIS, AND THIS IS, YOU KNOW, IN 2025.

BUT, WHAT DO YOU SEE, COMING DOWN THE PIPE, WITH THIS MASSIVE, ACROSS-THE-BOARD, GUTTING OF SO MANY OF THE HHS- INVOLVED PROGRAMS?

YOU KNOW, WHETHER IT IS RESEARCH, OR DISEASE, ALL OF THOSE THINGS.

LAYOFFS.

SOMETHING LIKE 10,000 PEOPLE, OVERALL.

WHAT DO YOU THINK THAT WILL DO, FOR AMERICANS' HEALTH?

>> NOTHING GOOD.

THE LAYOFFS HAVE ABSOLUTELY GUTTED SO MUCH OF THE INFRASTRUCTURE WE RELY ON.

WHETHER IT IS THE BIOMEDICAL RESEARCH INFRASTRUCTURE THAT GIVES US NEW TREATMENTS, AND NEW VACCINES, HOSPITAL PROGRAMS, CLINICAL TRIALS.

AND I THINK, REALLY IMPORTANTLY TO ME, PUBLIC HEALTH AGENCIES.

ESPECIALLY AT A LOCAL LEVEL.

PUBLIC HEALTH --THAT IS THE COMMUNITY OF PEOPLE WHO PREVENT SICKNESS IN OUR COMMUNITIES -- HAS ALWAYS BEEN UNDERFUNDED, AND STRETCHED THIN.

YOU CAN FIND PEOPLE TALKING ABOUT THIS PROBLEM, GOING BACK A CENTURY.

AND SO, INSTEAD OF ASSURING THAT UP, AND PRODUCING MORE INVESTMENTS IN IT, WE ARE NOW SEEING IT BEING UNDER INVESTED EVEN FURTHER, AND PEOPLE WHO HAVE BEEN TAKING THESE JOBS, BEING DRIVEN OUT OF THESE JOBS.

NOW, I TOLD YOU, PUBLIC HEALTH HAS BEEN UNDERFUNDED, SO IT DOES TEND TO RECRUIT A CERTAIN CATEGORY OF PEOPLE, PEOPLE WHO ARE VERY, VERY SERVICE MINDED AND ARE USED TO SWIMMING AGAINST THE TIDE BECAUSE THEY WANT TO HELP THEIR COMMUNITIES.

AND, FOR THEIR EFFORTS, THE GOVERNMENT IS NOW TELLING THEM THAT YOU ARE USELESS, YOU ARE A WASTE OF MONEY AND RESOURCES, WHEN THEY HAD VERY, VERY FEW RESOURCES TO BEGIN WITH.

IT IS JUST COMPLETE NONSENSE, AND IT MEANS THAT WE ARE GOING TO BE INTENSELY VULNERABLE TO NEW EPIDEMICS, TO RE-EMERGING EPIDEMICS, LIKE MEASLES, TO WHATEVER PANDEMIC THREAT WE ABSOLUTELY WILL FACE NEXT.

PUBLIC HEALTH IS THE FRONTLINE OF OUR DEFENSE AGAINST THESE GROWING THREATS, AND WE ARE WEAKENING THAT FRONTLINE, AFTER THE PANDEMIC SHOULD HAVE SHOWN US HOW IMPORTANT IT IS TO KEEP ALL OF OUR HEALTH IN GOOD STEAD.

>> YEAH, AND THOSE CUTS ARE DOING WHAT YOU ARE SAYING IN THE U.S., AND THE USAID CUTS ARE MAKING US MORE VULNERABLE AROUND THE WORLD.

THE IDEA OF A PANDEMIC -- WHICH, OF COURSE, KNOWS NO BOUNDARIES --AND ALL THE OTHER HEALTH THINGS THEY HAVE CUT OFF.

BUT, YOU'VE TALKED ABOUT A PANIC NEGLECT CYCLE.

TELL US WHAT THAT IS, AND WHETHER THE U.S. IS PREPARED, POTENTIALLY, FOR ANOTHER KIND OF PANDEMIC?

>> SO, THE PANIC NEGLECT CYCLE IS THIS IDEA THAT WHEN A CRISIS HITS, THE ATTENTION AND RESOURCES FLOW TOWARD IT.

ONCE IT STARTS TO ABATE, THERE IS THIS COLLECTIVE AMNESIA.

PEOPLE GET WHY WE EVER BOTHERED IN THE FIRST PLACE, AND RESOURCES FLOW AWAY.

PEOPLE HAVE BEEN TALKING ABOUT THIS IDEA FOR A LONG TIME, AND I THINK WHAT IS REALLY IMPORTANT TO UNDERSTAND, IS THAT IT IS NOT PASSIVE NEGLECT, IT IS NOT THAT THE THREAT GOES AWAY AND PEOPLE GRADUALLY FORGET.

WHAT WE ARE SEEING, RIGHT NOW, IS THE TRUTH OF IT, WHICH IS THAT ACTIVELY CONSTRUCTED.

BUT, RESOURCES ARE DELIBERATELY WITHDRAWN FROM THE VERY PEOPLE, AND THE VERY INSTITUTIONS THAT GO INTO FIGHTING THESE PROBLEMS.

AND WE ARE LEFT IN A MUCH, MUCH WORSE PLACE.

NOW, YOU ASKED IF WE WERE READY FOR THE NEXT PANDEMIC --WE WERE NOT READY FOR COVID.

WE ENDED UP IN A MUCH WORSE PLACE, I THINK, A MUCH POORER STATE OF READINESS, AND THAT STATE DISINTEGRATES, WITH EVERY PASSING DAY, WITH EVERY PASSING WEEK, AND WITH EVERY EXTRA CUP.

WE ARE INTENSELY VULNERABLE TO WHAT WILL HAPPEN, NEXT.

>> I WAS GOING TO SAY, IT IS EXTRAORDINARY TO HEAR YOU SAY THAT IN THE MOST IMPORTANT COUNTRY OF THE WORLD, WHICH IS THE ENVY OF THE WORLD'S MEDICAL SYSTEM, IN TERMS OF, YOU KNOW, FOR THOSE WHO CAN AFFORD IT, OBVIOUSLY.

BUT, CAN I JUST ASK YOU SOMETHING?

BECAUSE I WANT TO TALK ABOUT YOUR BOOK, "AN IMMENSE WORLD."

YOU WRITE THAT YOU DID SUFFER BURNOUT COVERING ALL OF THIS.

YOU ARE NOW IN OAKLAND.

AS I SAID, YOU ARE NO LONGER ON THE FRONTLINE OF HEALTH THIS BOOK, IT IS ABOUT ANIMAL DECEPTION, AND THE YOUNG READERS' VERSION IS COMING OUT IN MAY.

IN THE INTRODUCTION, YOU WRITE, "I KNOW EVERY ANIMAL PERCEIVES THE WORLD IN A COMPLETELY DIFFERENT WAY THAN I DO.

I UNDERSTAND THAT EVEN IN THE MOST EVERYDAY SPACES, MY HOUSE, OR MY NEIGHBORHOOD, THERE ARE HIDDEN TREASURES THAT I MISS, AND THAT EVEN FAMILIAR CREATURES CAN DETECT.

KNOWING THIS, MAKES ME FEEL SMALL AND HUMBLE, BUT ALSO A PART OF SOMETHING GRAND AND EXTRAORDINARY.

I FEEL LIKE I HAVE BEEN TOLD THE MOST INCREDIBLE SECRET IN THE WORLD."

IT IS REALLY WONDERFUL, AND I SEE YOU SMILING, AND I WONDER HOW YOU CAME TO THAT, AND WHAT YOU WANT TO TELL THE KIDS?

>> I HAVE ALWAYS LOVED THE NATURAL WORLD.

AND I THINK THAT THE IDEA BEHIND "AN IMMENSE WORLD" IS THAT EVERY CREATURE SENSES THE WORLD IN A DIFFERENT WAY, AND THAT WE, HUMANS, FOR ALL OF OUR ADVANTAGES, ARE ONLY PRIVY TO A SMALL PART OF THE FULLNESS OF REALITY.

I THINK THAT IS ONE OF THE MOST BEAUTIFUL CONCEPTS IN NATURE.

IT TELLS US THAT, WHEREVER WE GO, IN THE GARDEN OUTSIDE MY FOUND, THERE IS MAGIC TO BE HAD IN THE MUNDANE, AND THE EXTRAORDINARY IS ALWAYS AROUND THE CORNER FROM THE ORDINARY.

I WANT KIDS, WITH THIS YOUNG READERS' ADDITION THAT IS OUT IN MAY --TO BE ABLE TO TAP INTO THAT CURIOSITY, AND I WANT THEM TO BE ABLE TO DEVELOP THAT SAME KIND OF EMPATHY THAT I HOPED TO ENGENDER IN MY ADULT READERS, TOO.

THE DESIRE TO THINK ABOUT THE LIVES AND EXPERIENCES OF OTHER CREATURES AROUND US, TO STEP INTO THEIR SHOES.

YOU KNOW, I AM ALSO A BIRDER, I SPEND A LOT OF TIME LOOKING AT BIRDS, AND THAT, TO ME, IS PART OF THE SAME CONCEPT.

IT IS PART OF THIS DESIRE TO GIVE THE REST OF THE NATURAL WORLD YOUR ATTENTION, YOUR TIME, AND YOUR CONSIDERATION, IN RECOGNITION THAT IT IS IMPORTANT, IT IS REAL, AND IT IS WORTHY OF ALL THIS.

>> I AM REALLY HAPPY TO END ON THAT.

AND I JUST WANT TO SAY, I LOVE YOUR COMMENT THAT, YOU KNOW, HOPE IS A DISCIPLINE.

THE IDEA OF HOPE IS SOMETHING IS VERY IMPORTANT FOR PEOPLE TO THINK THAT HOPE IS NOT JUST AN EMPTY LUXURY.

ED YOUNG, THANK YOU SO MUCH, INDEED.

>>> NOW, BACK TO TRUMP'S TRADE WAR, WHICH HAS BEEN SHOCKING GLOBAL MARKETS AND RAISING FEARS OF A RECESSION.

ALL THIS UNCERTAINTY HAS LED ECONOMISTS --AND FRIENDLY, THE WORLD --TO BEG THE QUESTION, "WHY?"

HERE TO OFFER HIS INSIGHT ON THAT MILLION-DOLLAR QUESTION IS OREN CASS, FOUNDER OF THE CONSERVATIVE THINK TANK, AMERICAN COMPASS, WHICH HAS TIES TO PROMINENT REPUBLICANS LIKE VICE PRESIDENT JD VANCE, SECRETARY OF STATE MARCO RUBIO, AND OTHERS.

HE JOINED WALTER ISAACSON JUST BEFORE THE PRESIDENT REACHED FOR THE PAUSE BUTTON, AND HERE IS WHAT HE THINKS MOTIVATES TRUMP'S ECONOMIC VIEWS.

>> THANK YOU, CHRISTIANE.

AND OREN CASS, WELCOME BACK TO THE SHOW.

>> IT'S GREAT TO SEE YOU, AGAIN.

>> YOU HAD AN OP-ED THAT YOU WROTE THIS WEEK THAT SAYS, "STOP FREAKING OUT.

TRUMP'S TARIFFS CAN STILL WORK."

OKAY, GIVE ME THE PLAYBOOK.

HOW SHOULD THEY WORK?

>> WELL, I THINK THE IMPORTANT PIECE TO START WITH IS THAT I THINK THE DIRECTION, HERE, WOULD BE A VERY POSITIVE ONE.

I THINK IT IS ACTUALLY VERY ENCOURAGING, TO SEE PEOPLE FOCUSING ON IMBALANCES IN THE TRADING SYSTEM, THE NEED TO REALLY CHANGE THE WAY SOME OF THIS WORKS.

YOU KNOW, FRANKLY, ACCEPTING THAT THERE WILL BE SOME COSTS ASSOCIATED WITH DOING THAT.

IT IS REFRESHING TO HAVE LEADERSHIP THAT IS WILLING TO SPEAK ABOUT THE COSTS AND SAY, "HERE IS WHY IT IS WORTH IT."

THAT BEING SAID, I THINK YOU HAVE A RESPONSIBILITY TO MINIMIZE THOSE COSTS, AND I THINK WE COULD GET THERE, FOR ONE THING, IF WE FACE A LOT OF THESE TARIFFS IN.

I THINK THERE ARE SITUATIONS WHERE YOU MIGHT WANT TO DO SOMETHING RIGHT AWAY, BUT A LOT OF THESE TARIFFS WOULD WORK A LOT BETTER IF YOU SAID, "LOOK, HERE IS WHAT WE WILL DO IN SIX MONTHS, IF WE DON'T GET A DEAL."

AND HAVE SOME TIME TO TRY TO DO THAT NEGOTIATION, AND GET THE DEAL, AND GET PEOPLE TIME TO PREPARE AND ADOPT.

SO, I THINK A LOT MORE PHASING IN ON THE FRONT END, AND THEN I ON THE BACK END.

PEOPLE KNOW --NEED TO KNOW WHAT PARTS OF THIS ARE GOING TO BE PERMANENT.

PEOPLE NEED TO KNOW, IS THE PLAN TO MAKE A DEAL WITH CHINA, OR IS THE PLAN TO EXCLUDE CHINA?

AND THE GOAL, WITH ALL OF THIS, IS TO GET MORE INVESTMENT IN THE UNITED STATES.

IF YOU WANT THE INVESTMENT, YOU NEED TO GIVE THE CLEAR PICTURE OF WHAT THE SITUATION IS GOING TO BE.

>> THERE SEEM TO BE TWO TYPES OF TARIFFS HE IS TALKING ABOUT.

A 10% ACROSS THE BOARD -- WHICH I KNOW YOU HAVE KIND OF ADVOCATED IN THE PAST, WHERE IT IS NOT TO PICK AND CHOOSE, PICK AND CHOOSE --AND THEN, THESE VERY SPECIFIC TARIFFS ON CERTAIN COUNTRIES, BASED ON THEIR TRADE DEFICIT.

EXPLAINED TO ME, WHY YOU WOULD DO BOTH?

>> WELL, THEY HAVE VERY DIFFERENT PURPOSES.

YOU KNOW, THE 10% GLOBAL TARIFF IS THE ONE THAT CERTAINLY, MY ORGANIZATION, AMERICAN COMPASS, HAS DONE A LOT OF WORK ON, AND I THINK IS THE REALLY IMPORTANT, PERMANENT PEACE THAT WE JUST PUT IN OUR ECONOMIC SYSTEM THAT SAYS, YOU KNOW, WE ARE PUTTING A FINGER ON THE THIS COUNTRY.

WE THINK MAKING THINGS MATTERS.

AND IF ALL THINGS EQUAL, WE WOULD RATHER HAVE YOU MAKING THINGS, HERE.

ESPECIALLY IF YOU ARE PLANNING TO SELL THEM, HERE.

SO, THAT, I THINK, IS A STABLE, PERMANENT ELEMENT, IS REALLY GOOD.

THE RECIPROCAL TARIFFS --THESE ONES THAT ARE COUNTRY BY COUNTRY --ARE AT MUCH HIGHER LEVELS, IN A LOT OF CASES.

I THINK THEY ARE BEST UNDERSTOOD AS NEGOTIATING TARIFFS.

I DON'T THINK THE IDEA IS THAT IT ACTUALLY BENEFITS THE U.S. ECONOMY IN THE LONG RUN TO HAVE A HIGH TARIFF WITH A TRADING PARTNER, LIKE A JAPAN, OR LIKE THE EU.

OR, CERTAINLY, CANADA AND MEXICO.

BUT, THE IDEA IS THAT WE DO WANT THEM TO CHANGE THEIR OWN BEHAVIOR, IN VARIOUS WAYS, YOU KNOW?

THEY DO HAVE A LOT OF POLICIES, IN SOME CASES, THAT THEY ARE USING TO PROMOTE TRADE IMBALANCES, TO EXPORT MORE INTO OUR COUNTRY, AND TO BUY LESS FROM US, IN RETURN.

AND IF WE SAY, "THAT'S FINE, WE LOVE FREE TRADE ANYWAY," THEN THEY KEEP DOING IT.

IF WE SAY, "THAT'S NOT REALLY AN OPTION ANYMORE," THEN I THINK THERE IS ROOM FOR A LOT OF PROGRESS.

>> YOU TALK ABOUT THIS "COUNTRY BY COUNTRY" APPROACH WITH TRADE IMBALANCES, WHICH IS WHEN A COUNTRY EXPORTS MORE TO US THAN WE EXPORT TO THEM.

BUT, TELL ME, WHY ARE TRADE IMBALANCES INHERENTLY BAD?

>> SO, I THINK IT IS IMPORTANT TO SAY, A TRADE IMBALANCE WITH A SPECIFIC COUNTRY ISN'T INHERENTLY BAD.

YOU CAN HAVE ALL SORTS OF REASONS THAT YOU BUY MORE FROM SOME COUNTRIES AND SELL TO OTHERS.

RIGHT?

YOU CAN IMAGINE YOU BUY A LOT OF RAW MATERIALS FROM ONE PLACE AND SELL FINISHED PRODUCTS TO ANOTHER.

THE CONCERN IS WHEN YOU HAVE A VERY LARGE IMBALANCE, OR A TRADE DEFICIT, OVERALL.

SO, IF YOU LOOK AT THE UNITED STATES, YOU KNOW, WE HAVE ROUGHLY $1 TRILLION PER YEAR TRADE DEFICIT, AT THIS POINT.

WHICH MEANS, WE HAVE $1 TRILLION WORTH OF DEMAND FOR STUFF, THAT WE ARE NOT SERVING, WE ARE IMPORTING, INSTEAD.

AND IT SHOULD NOT BE A SURPRISE, THE FACT THAT WE LET MAN, WE WERE TAKING A LOT OF JOBS, A LOT OF GOOD BUSINESS THAT USED TO BE DONE IN THE UNITED STATES, PRODUCING THINGS, AND JUST MOVING IT ABROAD.

>> WELL, AREN'T A LOT OF THOSE TRADE BALANCE IS OFFSET BY THE FACT THAT WE HAVE DIGITAL SERVICES, AND ALL TYPES OF SERVICES THAT ARE NOT COUNTED IN THOSE TRADE IMBALANCES?

>> THAT IS A GOOD QUESTION.

THERE IS BOTH GOODS AND SERVICES TRADE AND IT IS TRUE THAT THE UNITED STATES HAS A SURPLUS IN SERVICES TRADE.

THE PROBLEM IS THAT SERVICES TRADE IS MUCH, MUCH SMALLER.

SO, YOU KNOW, GOODS TRADE IS AT LEAST FOUR TIMES THE SIZE OF SERVICES TRADE.

OR, AT LEAST, CERTAINLY, OUR DEFICIT IN GOODS IS AT LEAST FOUR TIMES THE SIZE OF OUR SURPLUS IN SERVICES.

AND SO, THAT TRILLION DOLLAR NUMBER IS ACTUALLY AFTER TAKING BOTH GOODS AND SERVICES INTO ACCOUNT.

IF YOU WERE TO LOOK AT JUST THE GOODS DEFICIT, IT IS WELL OVER $1 TRILLION.

AND SO, YOU KNOW, THERE HAS BEEN ONE PERSPECTIVE OVERTIME THAT HAS BEEN, "WELL, A TRADE DEFICIT IS A GOOD THING.

THAT MEANS PEOPLE ARE MAKING THINGS AND GIVING THEM TO US, AND WE DON'T EVEN HAVE TO MAKE ANYTHING AND SEND IT BACK."

RIGHT?

WHAT A GREAT DEAL.

BUT, IN EFFECT, WHAT WE HAVE BEEN DOING, IS OPENING UP CREDIT CARDS ON THE COUNTRY, YOU KNOW, ON THE NATIONAL CREDIT LINE, AND BUYING MORE AND MORE STUFF, THAT WE ARE NOT TRADING STUFF BACK FOR.

WE ARE TAKING ON DEBT TO DO IT.

AND SO, WE BOTH HOLLOWELL OUR OWN ECONOMY, MEANING WE LOSE THOSE JOBS, WE LOSE THOSE CAPABILITIES TO MAKE STUFF, AND WE LOSE THE FUTURE PROSPERITY, BECAUSE WE ARE SENDING BACK OWNERSHIP OF OUR COMPANIES, WE ARE SENDING BACK IOUS THAT SAY "WE WILL PAY YOU BACK FOR THIS, SOMEDAY."

SO, I JUST THINK IT'S REALLY IMPORTANT TO GO BACK TO THAT ECON 101 LESSON, WHEN ECONOMISTS TEACH WHY WE ARE SO CONFIDENT FREE TRADE IS A GOOD THING, THE MODEL ALWAYS ASSUMES YOU ARE TRADING THINGS THAT YOU MAKE, FOR THINGS THAT OTHERS MAKE.

AND THAT IS REAL TRADE.

AND THAT, I THINK, IS WHAT WE NEED TO GET TO, THAT BALANCED TRADE THAT REALLY DOES BENEFIT EVERYBODY, BUT NOT THIS WILDLY IMBALANCED TRADE, WHERE SOME PEOPLE, OR SOME COUNTRIES, REALLY, SORT OF CHOOSE TO EMBRACE A LOT OF THE INDUSTRY THAT IS MOST ECONOMICALLY VALUABLE.

>> ARE WE BETTER OFF BEING A NATION THAT PRODUCES SERVICES, THEN BEING A NATION THAT PRODUCES MANUFACTURED GOODS?

>> I THINK WE ARE BETTER OFF BEING A COUNTRY THAT PRODUCES BOTH.

I THINK THAT SORT OF THE EVERYTHING IN MODERATION MODEL REALLY APPLIES TO THE FACT THAT WE NEED TO HAVE A DIVERSIFIED ECONOMY.

WE HAVE A LOT OF DIFFERENT KINDS OF PEOPLE, LIVING IN A LOT OF DIFFERENT KINDS OF PLACES, WITH A LOT OF DIFFERENT ASPIRATIONS.

AND ECONOMICS DOESN'T TAKE ANY OF THAT INTO ACCOUNT.

THE ECONOMIC MODELS THAT SAY "JUST SPECIALIZE IN WHATEVER YOU DO BEST," AND CELEBRATE AT THE STUFF THAT SOMEONE CAN DO MORE CHEAPLY GOES OVERSEAS, THAT MODEL WOULD SAY, YOU KNOW, WHAT WE SHOULD REALLY DO, LET'S SEND ALL THE MANUFACTURING OVERSEAS, AND LET'S JUST SPECIALIZE IN FINANCE, AND TECH, AND MEDIA IN OUR BIG YOU COULD PROBABLY GET GDP UP PRETTY HIGH, THAT WAY.

BUT, I THINK MOST PEOPLE WOULD RECOGNIZE THAT IS NOT ACTUALLY A HEALTHY ECONOMY.

AND WHAT WE HAVE BEEN DOING IS PUSHING FURTHER AND FURTHER IN THAT DIRECTION WITH THIS FREE- TRADE SYSTEM, AND I THINK WHAT WE ARE ESSENTIALLY SAYING NOW, AND WHAT THE TRUMP ADMINISTRATION IS TRYING TO DO, SAYING, "THAT WAS THE WRONG TRADE-OFF.

WE NEED TO START PUSHING BACK THE OTHER DIRECTION."

YOU KNOW, AS AN ECONOMIST WOULD SAY, AT THE MARGIN.

IF YOU ARE ASKING, GIVEN WHERE WE ARE RIGHT NOW, WOULD WE TRADE OFF SOME OF THOSE, YOU KNOW, JOBS IN HIGH-TECH SERVICES, FOR MORE GOODS MANUFACTURING JOBS IN THE MIDDLE OF THE COUNTRY?

I THINK THAT IS THE DIRECTION THAT WOULD BE MUCH, MUCH BETTER FOR US.

BUT, IT TAKES A DIFFERENT SET OF POLICIES TO GET THERE.

>> WELL, TRUMP HAS PUT ON THESE TARIFFS THAT ARE COUNTRY SPECIFIC, BASED ON THE TRADE IMBALANCE THEY HAVE WITH US, AND SAID THAT THEY SHOULD ALL TRY TO NEGOTIATE WITH US, TO DO THINGS TO GET THAT DOWN.

IS THERE SOME MESSINESS, OR PROBLEM, OR SOME CRONY CAPITALISM THAT COULD BE INVOLVED, WHEN YOU START HAVING 70 OR 80 OF THESE NEGOTIATIONS?

>> THERE IS DEFINITELY SOME MESSINESS, NO QUESTION ABOUT THAT.

I THINK ONE THING THAT THE ADMINISTRATION WAS DELIBERATING ON BEFORE, BEFORE LIBERATION DAY, AND THAT THEY SEEMED TO BE FOCUSING ON SOMEWHAT NOW, IS THAT THERE ARE OBVIOUSLY HIGHER PRIORITY AND LOWER PRIORITY TRADING RELATIONSHIPS, HERE.

AGAIN, TO SOME EXTENT, THAT SPEAKS TO THE PHASING.

IF THERE ARE A LOT OF COUNTRIES THAT WE ARE NOT EVEN GOING TO GET AROUND TO TALKING TO FOR A LONG TIME, I'M NOT SURE IT MAKES A LOT OF SENSE TO STICK THEM WITH THE FULL TARIFF IN THE MEANTIME., IT IS VERY CLEAR THAT THEY ARE FOCUSING, YOU KNOW, FIRST AND FOREMOST, ON JAPAN, ON KOREA, ON INDIA, ON THE EU, ON THE UK.

AND IT IS CERTAINLY POSSIBLE TO DO A FEW AGREEMENTS AT THE SAME TIME.

IT IS THE CASE, THAT ANY NEGOTIATION, YOU KNOW, THEN RAISES THAT RISK OF, OKAY, WHO ARE YOU BENEFITING, WHO ARE YOU I WOULD JUST NOTE THAT, OF COURSE, THE ENTIRE MODEL OF FREE TRADE AGREEMENTS THAT EVERYBODY HAS ALWAYS BEEN SO ENTHUSIASTIC ABOUT, AND PROMOTING AS EXACTLY THE RIGHT WAY TO PROMOTE TRADE, IS A NEGOTIATION, TOO.

RIGHT?

YOU KNOW, GO CHECK OUT THOSE FREE-TRADE AGREEMENTS.

IT IS 5000 PAGES LONG AND OVERWHELMINGLY WRITTEN BY CORPORATE LOBBYISTS.

AND SO, YOU KNOW GO NEGOTIATIONS ARE GOING TO BE AN IMPORTANT ELEMENT OF TRADE.

I THINK WHAT IS DIFFERENT HERE, THE UNITED STATES IS SAYING, "WE HAVE DIFFERENT DEMANDS THAN WE USED TO."

FOR THE LONGEST TIME, THE DEMAND WAS "OPEN YOUR MARKET, OPEN YOUR MARKET, OPEN YOUR MARKET, WE JUST WANT OPEN MARKETS."

I THINK WITH THE U.S. IS SAYING NOW, ESPECIALLY AS CHINA RISES, AS WE MOVE INTO WHAT SOME FOLKS ARE CALLING A MULTIPOLAR WORLD, WHERE THE U.S.

ISN'T JUST IN CHARGE OF EVERYTHING, YOU KNOW, I THINK THE U.S.

ABSOLUTELY WANTS TO HAVE A STRONG ECONOMIC AND SECURITY ALLIANCE, BUT IT HAS SOME DEMANDS FOR THAT.

IT WANTS TO HAVE BALANCED TRADE WITHIN THAT ALLIANCE.

IT WANTS THOSE ALLIES TO REALLY DO THEIR PART ON THE SECURITY SIDE.

AND, IT WANTS EVERYBODY TO AGREE TO KEEP CHINA OUT.

AND I THINK THOSE ARE PRETTY REASONABLE DEMANDS, YOU KNOW?

WE ARE NOT EXPLOITING PEOPLE WITH DEMANDS LIKE THAT.

BY THE WAY, THOSE ARE THINGS THAT THE U.S. WILL HOLD ITSELF TO, AS WELL.

BUT, IT IS DEFINITELY A DIFFERENT SHAPE FOR NEGOTIATION THEN THE ONE FOLKS HAVE BECOME ACCUSTOMED TO.

>> SO, YOU THINK THAT, AS PART OF THESE TRADE NEGOTIATIONS, WE SHOULD BE TELLING ALL THE COUNTRIES AROUND THE WORLD, OR MOST OF THEM, "DON'T TRADE WITH CHINA?"

>> YES, IN FACT, WE ARE ALREADY DOING THAT.

SECRETARY DOESN'T, EVEN IN THE CONTEXT OF THE EARLY CONVERSATIONS WITH MEXICO AND CANADA, EMPHASIZED THAT ONE THING WE ARE REALLY LOOKING FOR IS THAT THEY AGREED TO ADOPT THE SAME POLICIES TOWARD CHINA THAT WE HAVE.

AND NOW, YOU ARE EVEN SEEING -- WITH AS MANY OTHER COUNTRIES AS THAT SET OF COUNTRIES CAN THEN FACE CHINA, JOINTLY.

>> WELL, EVEN THE EUROPEAN UNION IS NOW DECIDING TO HAVE TRADE NEGOTIATIONS WITH CHINA.

>> I THINK, YOU KNOW, THE EUROPEAN UNION IS AN INTERESTING CASE, AND I THINK THE NEW, EU EVEN IN DEALING WITH SOME OF THE CONFLICTS OVER ELECTRIC VEHICLES, AND SO FORTH, HAS SHOWN MUCH LESS CONVICTION, THAT IT ACTUALLY NEEDS TO CONFRONT CHINA, AND MUCH MORE POTENTIAL OPENNESS TO WORKING WITH CHINA.

AND THAT IS A REALLY INTERESTING QUESTION, THAT THE EU IS GOING TO HAVE TO DECIDE, FOR ITSELF.

I THINK THAT THERE IS A FUNDAMENTAL QUESTION OF CIVILIZATIONAL WILL, WHETHER THE EU WANTS TO REMAIN IN THE SPHERE OF WESTERN DEMOCRACIES AND MARKET ECONOMIES, OR IF IT WANTS TO BE IN PARTNERSHIP WITH CHINA.

I CERTAINLY KNOW WHAT I WOULD CHOOSE, AND WHAT I WOULD ADVISE THEM TO CHOOSE, BUT TO SOME EXTENT, THEY ARE GOING TO HAVE TO MAKE THAT DECISION FOR >> ONE OF THE THINGS I DON'T QUITE UNDERSTAND ABOUT YOUR PUSH AGAINST CHINA ON ALL OF THIS, IS THAT DURING HIS RUN, PRESIDENT TRUMP REALLY TRY TO MAKE A DEAL WITH CHINA, XI JINPING, AND HE IS STILL TALKING ABOUT WANTING TO MEET WITH XI JINPING AND MAKE A DEAL.

SO, AT THE VERY LEAST, WOULDN'T THAT CONFUSE OUR ALLIES, OR WOULDN'T THAT BE BAD POLICY?

>> WELL, ON THE CONFUSION POINT, I AGREE, ABSOLUTELY.

I THINK ONE OF THE WAYS THAT THE ADMINISTRATION REALLY NEEDS TO IMPROVE WHAT IT IS DOING, HERE --YOU KNOW, I TALKED ABOUT THE IDEA OF PHASING IN SOME OF THE TARIFFS --JUST BASIC COMMUNICATION ON, WHAT IS THE ACTUAL PLAN?

WHAT IS THE GOAL?

I THINK THAT IS INCREDIBLY IMPORTANT, BOTH FOR MARKETS, AND FOR BUSINESSES TRYING TO INVEST, AND FOR COUNTRIES TRYING TO NEGOTIATE WITH US.

SO, I AGREE THERE, ENTIRELY.

I DO THINK, THOUGH, THERE HAS BEEN A CLEAR PROGRESSION IN OUR EFFORTS TO ENGAGE WITH CHINA, YOU KNOW?

IT WAS NOT THAT LONG AGO --25 YEARS AGO --THAT WE WERE FULLY EMBRACING THEM AND BELIEVING KNOW, HELP THEM LIBERALIZE, AND DEMOCRATIZE, AND EVERYBODY WAS INCREDIBLY ENTHUSIASTIC.

AND I WOULD SAY IT TOOK PROBABLY 10 OR 15 YEARS FOR FOLKS TO NOTICE THAT WAS REALLY NOT WORKING.

AND, YOU KNOW, I REMEMBER, EVEN IN 2012, I HAD THE CHANCE TO WORK FOR THEM GOVERNOR MITT ROMNEY WHEN HE WAS RUNNING FOR PRESIDENT.

AND AT THAT TIME, HE WAS ONE OF THE FIRST TO SAY, "ACTUALLY, THIS ARRANGEMENT WITH CHINA IS NOT WORKING, WE NEED TO TAKE A DIFFERENT STANCE."

AND THEN, OBVIOUSLY, TRUMPETED THAT, VERY AGGRESSIVELY IN 2016.

THAT WAS KIND OF THE POINT AT WHICH WE STOOD UP AND STARTED SAYING, "THE MODEL THAT WE THOUGHT WAS GOING TO WORK, IS NOT WORKING.

WE NEED TO WORK ON THIS."

AND IT WAS ENTIRELY REASONABLE, AT THAT POINT, TO THINK, "WELL, LET'S NEGOTIATE, SIT DOWN WITH THEM, TELL THEM WE ARE NOT GOING TO TOLERATE THIS, FIND A WAY TO MAKE IT WORK."

THE TRUMP ADMINISTRATION TRIED THAT, IT DIDN'T WORK, THEY CAME TO A DEAL THAT DIDN'T END UP BEING WORTH ALL THAT MUCH, AND CHINA HAS JUST CONTINUED TO DIG IN, TO FURTHER WORSEN AND BALANCES.

WE ARE NOW GOING THROUGH WHAT A LOT OF FOLKS ARE CALLING "CHINA SHOCK 2.0."

BECAUSE AGAIN, THEY HAVE ENORMOUS EXCESS CAPACITY THAT THEY ARE DUMPING INTO OTHER MARKETS, AROUND THE WORLD.

IT IS A HUGE PROBLEM FOR EUROPE, IT IS A HUGE PROBLEM FOR OTHER DEVELOPING COUNTRIES.

SO, I THINK WE ARE AT THE POINT WHERE WE HAVE TO ACCEPT THAT THERE IS NOT A NEGOTIATION HERE THAT IS GOING TO END HAPPILY.

WE ARE HEADED TOWARD A DIFFERENT KIND OF WORLD, FOR THE FORESEEABLE FUTURE.

>> THERE IS A SAYING IN CHINA OF "EAT BITTERNESS," WHICH I THINK ROUGHLY MEANS "TOLERATE PAIN."

DO YOU FEAR THAT CHINA CAN TOLERATE MORE PAIN, THAN THE AMERICAN CONSUMER, AND THE AMERICAN VOTER WILL, IF WE GET INTO THIS CONTEST?

>> WELL, I THINK THERE IS A LOT OF ASYMMETRY HERE, THAT WORKS TO THE U.S.' ADVANTAGE.

PARTIALLY, BECAUSE WE DO HAVE SUCH A LARGE TRADE DEFICIT TODAY.

PARTLY, BECAUSE TREY JUST ISN'T SUCH A BIG PART OF OUR ECONOMY, BECAUSE WE HAVE SUCH A LARGE DOMESTIC MARKET.

WE ARE RELATIVELY MORE INSULATED FROM THE EFFECTS OF THESE POLICIES THAN MOST OF OUR TRADING PARTNERS ARE.

THERE IS NO QUESTION THAT -- CERTAINLY, NOW, THIS WEEK, WITH THE TRUMP ADMINISTRATION GOING UP TO AS MUCH AS, YOU KNOW, 100% TARIFF ON CHINA -- WHILE THAT IS PAINFUL, AND I THINK, YOU KNOW, FATALLY DISRUPTIVE, POTENTIALLY, FOR PARTICULAR BUSINESSES IN THE UNITED STATES, THE THREAT TO CHINA FROM THAT IS MUCH, MUCH LARGER.

SO, TO THE EXTENT THAT IT BECOMES A BATTLE OF WILLS, OR A TIT-FOR-TAT TRADE WAR, I THINK THAT THE UNITED STATES IS IN A VERY STRONG POSITION.

WHAT I REALLY WORRY ABOUT MORE, IS THAT IF WE TAKE SUCH A STRONG POSITION, THAT WE LOOK SUSTAINABLE, THEN WE ARE NOT ACTUALLY BEING MORE CREDIBLE, WE ARE BEING LESS CREDIBLE.

I THINK THE BEST THING THAT CAN BE SAID FOR THE TRUMP ADMINISTRATION'S APPROACH OF, WE ARE COMING IN ON DAY ONE AND STICKING ALL THIS STUFF IN, IS, WELL, NO ONE IS GOING TO DOUBT THAT THEY MEAN IT.

THEY HAVE ALREADY DONE IT.

BUT, IF YOU DO IT SO AGGRESSIVELY THAT PEOPLE ARE GOING TO LOOK AT IT AND SAY, "WE ARE NOT REALLY SURE YOU CAN KEEP THAT UP VERY LONG," THEN YOU HAVE ACTUALLY WEAKENED YOUR OWN CREDIBILITY, AND GIVEN THEM A REASON TO DRAG THINGS OUT, AND SO, I THINK THERE IS A BALANCE TO BE STRUCK, THERE.

AND, TO BE IN THE RIGHT POSITION FOR NEGOTIATION, TO MINIMIZE THE COST, TO MAXIMIZE THE POTENTIAL BENEFIT, WHAT WE NEED TO BE SAYING IS, "LOOK, HERE IS WHAT WE WANT, HERE ARE GOING TO BE THE CONSEQUENCES IF WE DON'T MOVE TOWARD IT AT A RAPID PACE."

BUT, LET'S SEE WHAT WE CAN GET DONE AND LET'S SEE HOW MUCH WE CAN ACCOMPLISH, BEFORE WE START INTO THE DISRUPTION, AND THE COSTS THAT, IDEALLY, WE WOULDN'T HAVE, IF WE DIDN'T >> OREN CASS, THANK YOU SO MUCH FOR JOINING US, AGAIN.

>> MY PLEASURE.

IT WAS GREAT TO SEE YOU.

>>> AND FINALLY, A MUCH-NEEDED ANTIDOTE.

A WORDLESS MASTERPIECE.

THE OSCAR-WINNING, ANIMATED FILM THAT IS WARMING HEARTS AROUND THE WORLD.

"FLOW."

A BLACK CAT IS THE FILM'S HERO, AND HE TEAMS UP WITH A DOG, A R A, A BIRD, AND A LEANER, AS THEY TRY TO SURVIVE THE AFTERMATH OF A BIG, BIBLICAL TYPE FLOOD.

IT MIGHT SOUND LIKE A DISNEY FILM, BUT IT IS NOT, IT IS VERY DIFFERENT.

THE ANIMALS DON'T HAVE HUMAN VOICES.

INSTEAD, THEY COMMUNICATE WITH THEIR REAL ANIMAL SOUNDS.

HERE IS A BIT OF THE TRAILER.

>> THE DIRECTOR JOINS US FROM LATVIA.

WELCOME TO THE PROGRAM, AND CONGRATULATIONS.

IT WAS AND IS AN AMAZING FILM.

HOW SURPRISED WERE YOU, THAT IT BEAT OUT MULTIMILLION DOLLAR DISNEY --I DON'T KNOW WHAT IT WAS, WHAT WAS THE DISNEY ONE?

ANYWAY, I WILL FIGURE IT OUT.

"INSIDE-OUT 2."

AND YOU WON THE OSCAR!

>> YES, VERY SURPRISED, BECAUSE THIS IS A SMALL, INDEPENDENT FILM, AND USUALLY, THESE FILMS DO NOT MAKE IT TO THE OSCARS.

AND IT IS ALSO THE FIRST LATVIAN FILM.

SO, THAT WAS A BIG SURPRISE.

>> SO, TELL US WHAT IT IS ABOUT?

I KIND OF SET IT, AND THERE ARE WORDS ON THE TRAILER THAT KIND OF DESCRIBE IT, BUT I LOOKED -- IS IT ABOUT, I DON'T KNOW, CLIMATE CHANGE?

IS IT ABOUT RISING SEA LEVELS?

IS IT ABOUT THE INCREDIBLE JOURNEY, OF HOMEBOUND FILMS, THAT PEOPLE WATCH IN THEIR CHILDHOOD, OF ANIMALS GETTING TOGETHER AND SURVIVING DIFFICULT TIMES?

>> WELL, IT IS ACTUALLY A VERY PERSONAL STORY TO ME, BECAUSE THIS IS MY SECOND FEATURE FILM.

BUT, IT IS THE FIRST TIME I HAVE WORKED WITH THE TEAM.

I USED TO WORK ALL ON MY OWN, AND I MADE MY FIRST FEATURE FILM ALL BY MYSELF.

AND THIS TIME, I HAD TO LEARN HOW TO WORK WITH A TEAM.

AND THIS CAT IN THE FILM IS ALSO USED TO BEING VERY INDEPENDENT AND DOING THINGS ITS OWN WAY, BUT NOW HAS TO LEARN TO COOPERATE WITH OTHERS.

SO, IT IS BASICALLY A STORY ABOUT ME LEARNING TO MAKE THIS FILM.

>> WOW!

THAT'S VERY INTERESTING.

OF COURSE, I CAME AWAY WITH IT THINKING IT IS THIS CAT WITH ALL THESE OTHER ANIMALS, I.E., ALLIES ARE GOOD, ALLIES OUR STRENGTH.

DIVERSITY, THAT MEANS THAT WORKS.

I PUT ALL OF THESE, YOU KNOW, MODEL CONTEXTS ON IT.

BUT, IT IS VERY PERSONAL FOR YOU?

>> YEAH.

BUT, IT'S GREAT, THAT MANY PEOPLE HAVE INTERESTING INTERPRETATIONS OF THE FILM.

AND ESPECIALLY, FOR KIDS' FILMS, I THINK IT IS VERY IMPORTANT TO ASK QUESTIONS, RATHER THAN SPOON FEEDING ALL THE INFORMATION.

BUT, AT THE SAME TIME, I THINK IT IS A FUN, ADVENTURE STORY.

SO, I THINK THERE IS FUN TO BE HAD, BUT ALSO A LOT OF QUESTIONS TO BE ASKED.

>> GINTS, I WILL PUT A LITTLE CLIP UP THERE WHILE WE ARE TALKING.

AGAIN, THE MAIN STAR IS THE CAT.

SO, LET'S JUST PLAY THIS QUICK CLIP.

LAUGHTER ] SO, THERE IS THE CAT, JUMPING ONTO THE BOAT, AS THE THING HE IS STANDING ON IS ABOUT TO GET SUBMERGED BY THE WATER, AND HE IS LUCKY, HE MAKES IT OUT.

TELL ME ABOUT --YOU KNOW, THE NO VOICES, AS WE SAID.

IT IS ALL ANIMAL VOICES, AND THERE IS ALSO SOME PICTURES OF HOW YOU ARE HOLDING MICS TO VARIOUS ANIMALS.

WHAT MADE YOU DECIDE TO GO THAT ROUTE?

>> YEAH, I WOULD NOT DESCRIBE THIS FILM AS BEING SILENT, BECAUSE THE VOICES, AND THE MUSIC, AND ALL THE SOUNDS, I THINK, OR EVEN MORE IMPORTANCE THAN MOST FILMS, BECAUSE THEY ARE TELLING THE STORY, AND IT IS A VERY DYNAMIC SOUNDTRACK.

I ALSO WRITE THE MUSIC, SO IT IS A BIG PART OF THE STORYTELLING.

BUT, YEAH, I WANTED TO MAKE A VERY CINEMATIC FILM THAT YOU HAVE TO EXPERIENCE, RATHER THAN BEING TOLD WHAT IS HAPPENING.

YOU HAVE TO FEEL ALL THESE EMOTIONS, AND BE VERY IMMERSED IN THIS WORLD, AND BASICALLY BECOME THE CAT, AND SEE THE WORLD THROUGH THE CAT'S POINT OF VIEW.

>> YOU SAID IT IS VERY PERSONAL, YOU, YOURSELF, HAVE EXPERIENCED ANXIETY, AND IT HELPS YOU WORK WITH OTHER PEOPLE.

AND WE ARE GOING TO PUT UP A PICTURE, RIGHT NOW, WHICH SHOWS YOU, WITH YOUR ACTUAL, REAL DOG, BASICALLY REACTING TO THE OSCAR NOMINATIONS WHILE WE CHAT.

HOW LONG DID IT TAKE, TO MAKE THE FILM?

I MEAN, YOU SAID THAT IT STARTS --YEAH, GO AHEAD.

>> YEAH, IT TOOK FIVE YEARS, WHICH WAS A LONG TIME, BUT ACTUALLY, FOR ANIMATED FILMS, THAT IS QUITE AN AVERAGE ONE.

>> AND WHAT WAS THE PROCESS?

DID YOU DO IT FROM ALL SORTS OF OPEN SOURCE MATERIALS?

I MEAN, YOU DID IT ON YOUR OWN COMPUTER?

>> YEAH.

I MEAN, IT'S VERY BASIC CONSUMER TECHNOLOGY, AND USED THE FREE SOFTWARE.

I DON'T WANT TO GO TOO MUCH INTO TECHNICAL DETAILS, BUT THIS MEANS THAT ANY KID CAN NOW HAVE THESE TOOLS, FROM WHICH OSCAR FILMS ARE BEING MADE.

IT OPENS UP OPPORTUNITIES TO DIFFERENT VOICES, SHARING THEIR STORIES, FROM PLACES WHERE THERE ISN'T A BIG FILM INDUSTRY, LIKE IN LATVIA, WHERE I AM FROM.

SO, I THINK WE WILL SEE A GREATER VARIETY OF STORIES BEING TOLD, AND PEOPLE HAVING OPPORTUNITIES TO SHARE THEM.

>> YEAH, WELL, IT'S REALLY GREAT.

AND LET'S JUST REPEAT, IT TOOK YOU $3.5 MILLION, THE COMPETITORS, AS I SAID, "INSIDE- OUT 2" $200 MILLION!

YOU WON THE OSCAR.

TELL ME ABOUT THE REACTION IN LATVIA?

IT REALLY HAS BEEN A MAJOR SOURCE OF NATIONAL PRIDE?

>> YEAH.

THIS WAS THE FIRST EVER LATVIAN FILM TO EVER EVEN BEEN NOMINATED.

IT WAS A BIG SURPRISE, FOR EVERYONE, AND IT IS VERY STRANGE, FOR AN ELEVATOR TO BECOME THE RECOGNIZED, OR BE NOTICED.

USUALLY, I AM JUST USED TO SITTING BY MY DESK AND JUST BEING KIND OF, YEAH, INTROVERTED.

BUT, NOW, I HAVE ALL THIS ATTENTION, AND THE OSCAR STATUE WAS EXHIBITED AT THE NATIONAL MUSEUM OF ART, AND TENS OF THOUSANDS OF PEOPLE CAME TO SEE IT.

LIKE, BASICALLY, HAD A BIG PARADE WHEN I GOT HOME FROM THE OSCARS.

WE HAD A HUGE CROWD WAITING FOR US.

SO, IT REALLY MEANT A LOT TO THE HOME COUNTRY, I THINK.

>> YEAH, AND JUST TELL ME ABOUT YOURSELF.

YOU SAID, OBVIOUSLY, YOU HAVE LEARNED TO BE MORE SOCIAL.

DO YOU THINK THAT YOU HAVE MANAGED TO DEAL WITH SOME OF YOUR ANXIETY ISSUES, IN OTHERS?

>> YEAH.

I THINK I HAVE LEARNED A LOT OF STUFF, BUT AT MY CORE, I THINK I STILL AM MYSELF, AND YOU CAN'T CHANGE YOURSELF.

THAT IS WHAT THE FILM IS ALSO ABOUT.

THE CAT IS KIND OF RUNNING AWAY FROM ITS PEERS, BUT THEN REALIZING THAT SOME OF THESE FEARS WILL STILL BE THERE, NO MATTER WHAT.

BUT, IT IS TO LET OTHERS GET CLOSE AND INTIMATE.

>> YEAH.

AND WILL THERE BE ANOTHER -- YOU KNOW, A CAT MOVIE AGAIN?

WHAT IS YOUR NEXT PROJECT?

>> YEAH, THAT'S -- THAT SAME OLD STORY, WHERE PEOPLE ARE ASKING, WHEN THERE IS A SUCCESS IN THE FILM INDUSTRY, YOU ARE ALWAYS BEING ASKED THE SAME THING, BUT I WANT TO DO SOMETHING VERY DIFFERENT.

BUT, I AM STILL GOING TO MAKE IT IN A VERY INDEPENDENT WAY, STILL IN LATVIA, BUT IT IS A DIFFERENT STORY, AND STYLE THIS TIME.

BUT, AGAIN, IT IS A VERY PERSONAL STORY.

>> OKAY.

WELL, GINTS, THANK YOU VERY MUCH FOR JOINING US.

AND THAT IS IT FOR OUR PROGRAM TONIGHT.

IF YOU WANT TO FIND OUT WHAT IS COMING UP ON THE SHOW EVERY NIGHT, SIGN UP FOR OUR NEWSLETTER AT PBS.ORG.

AND IN THE WORDS OF OUR SAINT, GOOD NIGHT, AND GOOD LUCK.

JOIN US AGAIN, TOMORROW.