The following is a transcript of the interview with National Economic Council Director Larry Kudlow that aired Sunday, June 30, 2019, on "Face the Nation."
MARGARET BRENNAN: We turn now to Larry Kudlow, the National Economic Council director, who joins us this morning from Connecticut. Larry, good to have you here. The president said he's not increasing tariffs on China and he's allowing American companies to do business with Huawei. That essentially throws that tech firm a lifeline. What did the U.S. get for these concessions?
LARRY KUDLOW: Well, let's- first of all, the talks are going to restart. I think that's a very big deal right there. No timeline, Margaret, but they are going to restart. Look, regarding the Huawei story, let me just try to clarify that, there will be sales from American companies, but- but only in the sense of the general merchandise, things that are available in other places around the world. Anything to do with national security concerns will not receive a new license from the Commerce Department. I think that's very important. I think people have to understand that stuff that's generally available will be- will be probably getting a temporary license from the Commerce Department. We'll see how far that goes. Second point is, we are hoping and expecting that China will engage in large scale purchases of American farm products and farm services as the talks continue. The talks may not be ending, the talks may not even be solved, but the president believes that China will begin to purchase American agriculture and that's going to be a big boost to our farmers and that would be a good faith show that these are serious talks and negotiations.
MARGARET BRENNAN: But on those purchases that you say might happen, in the meantime, the existing tariffs still stay in place. So that means the retaliatory tariffs are too. And even with this announcement of China potentially buying more product, according to the USDA that market for soybean farmers won't recover until 2026 or 2027. They're losing markets the longer this goes on. So how much damage can America stomach?
KUDLOW: Well look, that may be, I don't want to forecast that. We'll see if China steps in to fill the void. Our farmers have been terrific, they're patriots, they support the president's dealings with China. Pres- strongest president we've ever had in US-China relations. China's problems, you know, IP theft, forced transfers of technology, problems with getting into cloud services, problems with tariffs, problems with non-tariff barriers, all these things are going to have to be addressed. And that's the only way it'll help the American economy. It's a very unbalanced trading relationship, Margaret, as you may know. That has to be fixed. It's not going to be 50-50. They have many more remedies and correctives to make, and that's what President Trump said in his news conference and elsewhere in this recent trip to Japan. Now having said that, with respect to the farmers, we are doing the best we can. We are providing short-term assistance to keep them going and try to fill the void until we can get better international markets. The farmers themselves, the farm groups, they've been great patriots and we- we celebrate their support to make America's overall economy very, very strong. And let's see if the Chinese make good on this promise, that'll have a bearing. You know, the president said on tariffs, let me make this point, he said, "no additional tariffs for now." So he's going good faith to see how these talks go, to see if China delivers on an early agriculture promise, let's call it an early harvest, but that may be up for grabs. We will see. No one can predict with certainty.
MARGARET BRENNAN: But- but last time, my understanding is, the talks were going well and then China backed off of a perceived promise to change its laws. So, is there any indication from China that they will make the kind of structural change to their own laws to make good on some of the changes you want to see happen on IP, et cetera?
KUDLOW: You're right about the problem, and they did pull back from some agreements we thought we had, and by the by, that also includes all manner of enforcement to whatever conditions are made. So you're quite right. Can I sit here and tell you that's all going to work out? No, we don't know that. The teams are going to start negotiating in earnest, Ambassador Lighthizer, Secretary Mnuchin and others, but we don't know.
MARGARET BRENNAN: Okay.
KUDLOW: This is just a new first step. I always think it's better to talk than not to talk.
MARGARET BRENNAN: Sure.
KUDLOW: We have no assurances and again, the president himself said several times, we want quality talks, there is no timeline here. The issue is quality, not speed.
MARGARET BRENNAN: Well--
KUDLOW: So we will see if China delivers on some of these significant reforms.
MARGARET BRENNAN: Marco Rubio has been raising concerns though about what the president just agreed to do with Huawei, that tech firm. He said, "If President Trump has bargained away recent restrictions on Huawei, then the U.S. Congress will put them back in via legislation." Isn't this undercutting the president's negotiation and why would the U.S. allow American companies to do business with a firm that is working on surveillance and a national security threat?
KUDLOW: Well, look, again, I- I- I think Senator Rubio's concerns about all manner of national security are correct. They're proper concerns and I hope that when President Trump comes back, that he and others of us will be able to persuade Senator Rubio, that there will be no national security violations, that any additional licensing from the Commerce Department to American companies will be for what we call general merchandise, not national security sensitive- general merchandise meaning, you know, various chips and software and other services that are available all around the world, not specific to the U.S. But the president is not backing off on the national security concerns. We understand the huge risks regarding Huawei. And let me say, the president, several times, "We will fully address Huawei, not until the end of the trade talks." In other words--
MARGARET BRENNAN: Right.
KUDLOW: --that will come last and that will deal, you know, with much larger issues concerning the long term future with Huawei. So that's- what- what's happening now is simply a- a loosening up for general merchandise, maybe some additional licenses from commerce. It is not the last word. The last word is not going to come till the very end of the talks. This is a complicated matter. So I hope we'll be able to persuade Senator Rubio and others that- that- that we are as cautious and concerned as they are.
MARGARET BRENNAN: All right. Larry Kudlow, thank you so much. We'll be back in one minute with a lot more FACE THE NATION. Don't go away.