Transcript: White House economic adviser Larry Kudlow on "Face the Nation," June 10, 2018

President Trump reneged his support for a communique coming out of a contentious G7 meeting in Canada over the weekend following a very public dispute with Canadian Prime Minister Justin Trudeau over trade and tariffs.

Larry Kudlow is the president's top economic adviser. He joined us to discuss the G7, why the president retracted his support and the upcoming North Korea summit.

The following is a transcript of the interview with Kudlow that aired Sunday, June 10, 2018, on "Face the Nation."  


MARGARET BRENNAN: We are back with the chairman of the White House National Economic Council and the president's top economic adviser Larry Kudlow. Larry, welcome. I know you got in late last night from Canada from these G7 talks. The president called this Canadian Prime Minister "weak and dishonest." What exactly did he say to get this kind of response from the president?

LARRY KUDLOW: Well to be honest with you, Prime Minister Trudeau, who by the way, I respect. I've worked with him in good faith. Getting through a good communique on Friday and Saturday. So he holds a press conference. President is barely out of there, on the plane to North Korea and he starts insulting us. You know he starts talking about, U.S. is insulting Canada. We're not- we, Canada, are not going to be pushed around.

MARGARET BRENNAN: He was talking about the U.S. tariffs?

LARRY KUDLOW: That's correct- well, and in general, OK was an attack on the president. We're going to have retaliatory tariffs. Now, these are things that Prime Minister has said before basically, but he didn't say them before after a successful G-7 communique where President Trump and the others all worked in good faith to put a statement together- which by the way almost nobody expected to happen. In fact, reporters were asking me before the trip whether the president was going to show up at all. He did. He negotiated. He directed his team, myself and others. We worked it out. We used good language that was acceptable--

MARGARET BRENNAN: And then the president reneged on that G7 statement.

LARRY KUDLOW: No! No- I'm sorry. And then Trudeau decided to attack the president. That's the key point. And yes, you know if you attack this president he's going to fight back. But here's the key point Margaret, president is going to negotiate with Kim of North Korea and Singapore. It is a historic negotiation and there is no way this president is not going to stand strong. Number one he's not going to allow the people to suddenly take pot shots at him. Hours before that summit and number two Trudeau should've known better.

MARGARET BRENNAN: But- but why pick a-

LARRY KUDLOW: Trudeau--

MARGARET BRENNAN: -- a fight with a friend--

LARRY KUDLOW: Trudeau betrayed--

MARGARET BRENNAN: -- to impress an enemy?

LARRY KUDLOW: Well, Hey. Who picked the fight?

MARGARET BRENNAN: But the- what-

LARRY KUDLOW: I'm arguing Trudeau picked the fight.

MARGARET BRENNAN: Did you-

LARRY KUDLOW: Trudeau could have--

MARGARET BRENNAN: --did you believe he was going to step away from those retaliatory tariffs? Had he promised you privately that that's what was going to happen?

LARRY KUDLOW: Who?

MARGARET BRENNAN: Trudeau.

LARRY KUDLOW: Well.

MARGARET BRENNAN: You're saying he broke his word. That he publicly came out and said things.

LARRY KUDLOW: Let me say in the bilateral, between President Trump and Prime Minister Trudeau, which was- I was in that room. It was a very successful, calm, friendly, respectful bilateral. And we made great progress in moving towards a deal between the U.S. and Canada and perhaps NAFTA as a whole- was very successful. That is another reason why I think Trudeau betrayed Trump and the G7. I mean look they- they put together this good consensus the Western Allies were together. It was peaceful. They were good citizens. It was all in good faith. What's not in good faith is when you leave there you fly out of there and the host Canadian Prime Minister starts taking wacks at you, potshots at you, on the eve of this Korean summit. President Trump had no alternative in my opinion but to express his opinion that he is going to pull out. This, look-

MARGARET BRENNAN: To pull out, to pull out of?

LARRY KUDLOW: To pull out of the communique. That's what he said.

MARGARET BRENNAN: But when it comes to NAFTA, which you said there was progress on, you've said publicly the president is not going to pull out of NAFTA--

LARRY KUDLOW: That's correct.

MARGARET BRENNAN: --but then the president said he may broker a side bilateral agreement--

LARRY KUDLOW: That's correct.

MARGARET BRENNAN: --with Canada and Mexico.

LARRY KUDLOW: That's correct.

MARGARET BRENNAN: --How do you do both things at once? How's that not withdrawing from NAFTA?

LARRY KUDLOW: Oh no no no. It's-  we won't withdraw from NAFTA. We are heavy into negotiations. And the negotiation will either be bilateral, or they'll be trilateral--

MARGARET BRENNAN: So despite this blowup--

LARRY KUDLOW: one way or the other.

MARGARET BRENNAN: you still think--

LARRY KUDLOW: I don't

MARGARET BRENNAN: --you can get a trade deal with Canada?

LARRY KUDLOW: Well I don't know that Margaret. I mean I want to say I don't know, because I think again, - Trudeau's very unfortunate statements, his betrayal. He betrayed Trump. Can I ask, he betrayed the whole G-7

MARGARET BRENNAN: But how he said--

LARRY KUDLOW: by attacking right before that.

MARGARET BRENNAN: -- the same thing he said before which was that the tariffs were insulting and that they follow through with the July 1st.

LARRY KUDLOW: You want to say that right after a successful G7 meeting? Is that necessary? Seriously, where's the good faith? Where's the optimism? There- people came together at that meeting. I'm in there working with the heads of state. My great pleasure representing the president. The president was there were putting words on paper we're making adjustments were making compromises and we're coming out with the document that we can accept most people thought that wouldn't happen. So that happens and instead of being a good push to the Singapore-North Korean talks, Trudeau decides to come out and play to domestic political consumption and take potshots at the American President--

MARGARET BRENNAN: Can you--

LARRY KUDLOW: --who is representing the west of the world --

MARGARET BRENNAN: Can you explain--

LARRY KUDLOW: --That's just not fair play.

MARGARET BRENNAN: --Why the president called for Russia to rejoin the G8? Was that just meant as a provocation?

LARRY KUDLOW: No! I mean they were in the G8. It was the G8 for many years —

MARGARET BRENNAN: Right--

LARRY KUDLOW: And what--

MARGARET BRENNAN: --and then they were kicked out after invading part of Ukraine and annexing Crimea.

LARRY KUDLOW: So be it. Perhaps, as- by the way many foreign policy scholars agree with Trump on this. Not all, but many. We have to do business with Russia--

MARGARET BRENNAN: Sure but why at the G-7?--

LARRY KUDLOW: --We used to. -We used to. Because it was that meeting that Russia used to be invited to. It was the G8--

MARGARET BRENNAN: --But the- but

LARRY KUDLOW:  --for many years.

MARGARET BRENNAN:--the head of U.S. intelligence says that Vladimir Putin is trying to undermine the rule of law, Western ideals, and democratic norms so why invite him back to the very type of alliance he's trying to blow up?

LARRY KUDLOW: I think Dan Coats was correct in his accusations, but that doesn't mean you can't do business with them. OK. I think, you know, they're part of the world's story. They are a power. They are a military power. They're not an economic power. An - and can I just switch back Margaret? Look. Trump spent two days -  President Trump spent two days — This is something dear to my heart—talking to these ministers, these heads of state, about free trade, ending tariffs, ending tariff barriers, ending subsidies, stopping trade wars, moving towards fairness and unfair trading practices. We're the fastest growing economy in the G7. And he's got a vision--

MARGARET BRENNAN: Yeah—

LARRY KUDLOW: --here. He's probably going to be the- the best trade reformer in several decades in the world scene, why wouldn't he want to do—

MARGARET BRENNAN:  Larry we're going to have to—

LARRY KUDLOW: --Why would anybody want to undercut him?

MARGARET BRENNAN:  I want to have you come back and explain how all of this is going to add up to the kind of economic growth you're projecting, but we've got to leave it here for this moment and we'll be right back with more Face the Nation.