[applause] hello eric, please take a seat. Make yourself comfortable. Lori larry. We have reached an agreement on the u. S. Mexico candidate deal. How good is this for the rest of us . We have reached an agreement on deal. S. Mexicocanada mr. Kudlow i think it is better than nafta. I think it is broader than nafta. It updates nafta. Particularly in some important new economy ways. The way this thing was always sense,d in a bipartisan you have domestic content and labor issues which have been resolved. You also have new economy issues. In particular, intellectual Property Rights which has never been put into one of these trade agreements before. I think financial and digital services. They are going to make a big difference. We will get a lot of investments that we might not have had. I pulled out some of the estimates from the International Trade commission. A lot of people were quoting numbers from the itc. Lower numbers. But actually, they gave wide ranges on the u. S. Economy. The range was big. This reflects uncertainties about better investment and better risktaking. That is a gigantic number. On real gdp, there was a very wide range of 35 basis points on 1. 2 . The midpoint of that was three quarters of a percent. An could over time have increase of three quarters of a percent on real gdp. As 350,000 jobs per year. Those are big numbers. There is a currency stability provision in their which has never been done before. That is why we thought this was a template of a trade agreement. Economic growth is very substantial. Worker defense, domestic content, very substantial. Really, these are our big trading partners. The reality is, total trade with canada and mexico is basically slightly more than twice what it is with china. Is this a template you can apply to other trading partners . Mr. Kudlow i think so. We are also in negotiations with some breakthroughs on japan. We may be in negotiations with the United Kingdom if that works out. I have known him for a long time. I think he is the best trade negotiator in the business. I think he has created a template. It will be a progrowth template. Lets go to the sexier topic, as you put it. The journal reported this morning that u. S. And chinese negotiators are planning to delay tariffs on imported chinese goods. Do you want to confirm that publicly . Mr. Kudlow i cannot confirm that. It was in the journal. It must be true. Mr. Kudlow i understand. [laughter] fabulous newspaper. I will say this. The president hasnt struck a very constructive and optimistic tone. Tall which is a good thing. My friend Henry Kissinger returned from a week and china. In china. He reported back. The chinese hierarchy had a very positive attitude toward phase one. I am bound to say he has said if it is not satisfactory, if it is not the kind of deal he wants, then the december 15 schedule tariffs will go back into place. So there is still a possibility . Mr. Kudlow yes. There is. I dont want to sound pessimistic. I am just saying, the reality is those tariffs are still on the table. If president has indicated the short strokes remaining negotiations do not pan out to his liking, those tariffs could go back into place. So they could not, but they also could. There is no definitive decision on that yet. How long will it take for us to get to a phase one deal . Many people have said we are close. The president said last week we could wait till after the election. Which is it . Mr. Kudlow he is giving you a wide range of options. I reckon it is the mark of a good negotiator. I would not want to comment any further. There is no arbitrary deadlines on this. It is what it is. The president said it could go on so it could go on. If the president is happy with the outcomes that are being negotiated by secretary mnuchin. It may work. We have reported that agricultural purchases, getting china to commit to big purchases of u. S. Agricultural goods, is a sticking point. How is that going . Mr. Kudlow it is certainly a hot topic for conversation. What about chinese demand to rollback u. S. Tariffs . How is that going . Mr. Kudlow i believe that is also part of the conversation. Thank you. [laughter] some people have called phase one a mini deal. How significant will it be . Arent we just going back to where we were before this . Mr. Kudlow i have not read every detail. The Deputies Group is meeting almost daily or nightly. Things are moving. I think a lot of these chapters on ag, on intellectual property, on Financial Services, on currencies, a lot of the chapters have come beyond where we were last spring. We had advanced the ball. I have heard you and other members of the administration defends tariffs as a tactic toward the goal of leveling the playing field. Stopping intellectual property theft. At the same time, we have heard on executive earnings calls and in interviews that the uncertainty is really making it hard for them to plan their budgets, their sourcing, their supply chain. It is not just china. We have had new tariffs announced on argentina and brazil. Mr. Kudlow no, we have not implemented them. The administration had said it would. Mr. Kudlow no decisions have been made. The topic came up. But no decisions have been made. I was uncertain about that. Proposed tariffs on france. There was last spring when the president threatened to impose tariffs on mexico and then did not. There are many executives who say this has caused them to hold back on investments. There are many economists who say this pullback is a significant reason for the global slowdown and the u. S. Economic slowdown. How do you respond . Mr. Kudlow the u. S. Economy is in great shape and is getting better. We had a soft patch after a year of very stringent monetary tightening. Which i think is a key point. Now that the Balance Sheet is growing again, that is a good thing. The recent job numbers have been terrific. Most of the recent numbers have been terrific. We had very good productivity numbers this morning. On the productivity side, i think a lot of economists will change their estimates. You are almost at 3 . That is very positive. I think america is working. These employment numbers have exceeded almost everybodys expectations. Except mine. That was a joke. I would argue that america is working. We are seeing a worker boom. My old boss Ronald Reagan used to call it takehome pay after taxes and inflation. In less than three years, it has increased according to the census bureau. Can be go to the poll question . Im not sure we will have time. Mr. Kudlow i want to put these economic unders numbers in. Trade is very important. The u. S. Economy is doing very well with tax cuts and deregulation. America is working. There is a worker boom. Economists on both sides of the aisle pointed out the production workers are increasing their wages. We do want to go to the poll question. If we can put that up. While you are answering, we have one more question before we open it up for the audience. I really wanted to ask you, what are the prospects for another Trump Administration tax cut proposal before the election . We will get all the results at the end. Is the president going to propose another tax cut . If so, when and what are the parameters . Mr. Kudlow we are working on something called tax cuts 2. 0. We are soliciting lots of ideas from leading house and senate members. Outside experts and people in the administration. For individuals or companies . Mr. Kudlow i dont want to be specific. I can tell. Lets think it through. Mr. Kudlow my guess is what are some of the options. Mr. Kudlow we will have a very strong emphasis on middleclass tax relief. My guess is it will include business and individual reforms. What is the timeline . Mr. Kudlow i would not expect a product until well into 2020. Close to the election . Probably close to the election. It would be a postelection planning document. If elected, these are the kinds of approaches that a second term would have. John, do you want to take it away . Questions for larry from the audience . , justyou are all thinking a point of clarity, the president said he was raising tariffs on steel and aluminum from brazil and argentina because he felt they had been wrongly devaluing their currency. Maybe the rules did not go through. Let me ask you about what you just said. The china trade deal. You expect that what is being negotiated now to move beyond what was already agreed to by the chinese in the spring. I know you do not want to get into too much detail, but can you give us a little bit more on those parameters and understanding about what additional headway has been made on some of the tougher issues . Mr. Kudlow i dont want to open up the details of the negotiation. It is very hard to do that. I would suggest that, it looks to me like some of these key chapters i mentioned, i. T. Theft, currency stability, Financial Services expansion, opening up agriculture, not just purchasing of commodities but actually reducing nontariff barriers on agriculture. As well as actual spending. Because these things are not resolved, i cannot be too specific. We heard about those in the paper already. Those are not the real big issues like state subsidies and forced tech transfer. Those are for a later date, i presume. Mr. Kudlow this was always planned. What is not done will go into phase two. It is important to look at this in phases rather than one large discussion. It was a very significant phase which helped enhance the probability of getting an agreement. Please tell us who you are. Thanks for being here. Im wondering if you can give us some insight on how the white house balances the trade talks with endorsing congresss view of the hong kong protesters. Thinking maybe that gives the moderate forces in china less Maneuvering Room in a time we are talking to. How do you balance the priorities . Mr. Kudlow i dont think there is i direct link between some of the freedom of democracy issues and the trade talks. Think thed that, i president has made it very clear that the united states, consistent with its long history, favors freedom and democracy. And human rights. And feels compelled to speak out where these things develop. For theour support freedom of Democracy Group in hong kong which was subsequently ratified by the local elections. These are separate tracks. I understand those relationships between a trade track and a human rights track. I get that. Nonetheless, there may be some spillover. I understand that, too. These are complex matters. We have very strong American Values that pertain to freedom. We support freedom loving people wherever they are around the world. That is true for our entire history. Case, we supported the congressional resolution. Secretary pompeo has been very eloquent on this. Vice president pence has been very eloquent. President trump has said it many times. I understand they are related tracks. One last quick question. If not im going to wrap it up. I have a question about Interest Rates. We are all operating in a lowinflation environment. We cannot foresee them going up anytime soon. There is pressure to continue to bring them down. How would your economic policies shift . Mr. Kudlow normalization would mean . Going up from doubling where they are today. Even tripling where they are today. The cost of money is mispriced today in my opinion. Mr. Kudlow global rates are very low. For a variety of reasons. That word normalizing, i dont need to pick at you, but i do not know what that means. I dont know what that means. We live in a world where there is virtually no inflation. The traditional idea of the term structure of Interest Rates and the curve, the outlook for inflation, for real growth, for returns on capital and a term it pretty premium. That has been upended in recent years. I dont see why Interest Rates have to go up. I am just giving you my personal view. The market determines most Interest Rates. I dont think that our central bank or other Central Banks should worry about controlling Interest Rates. I think they should provide ample liquidity. The rates will take care of themselves. My former boss, paul volcker, just passed away. He was a great man. When i was a child, i work for him as a researcher and speechwriter. It was an easy job because he never used my stuff. [laughter] mr. Kudlow but he was a brilliant man. He was exactly the right man the country needed to stop inflation. I forever give him credit for that. He taught me a lot. He told me to come work for my boss. The very good article, i think it was in the his viewet journal, was that the market determined rights. I agree with that. I just dont think we have much to worry about. We do have a problem. The World Economy has slumped. The usa is the only country showing prominent economic growth. Growth will be much faster than 2019. Let us not forget, some of the incentive oriented supplyside policies that have worked throughout history. Namely, lower marginal tax rates. Rolling back unnecessary and excessive regulations. And attempts to reduce trade barriers. These are classic and neoclassic incentive oriented policies. My former boss Ronald Reagan and my current boss donald trump is using them. I think this centralbank obsession is wrong. I think they ought to be looking toward progrowth measures. The g7 will be here in the u. S. At camp david. In late spring, early summer. We are going to devote those sessions to what i call back to basics. We will be devoting those sessions to the need to restore World Economic growth. America, inn latin the middle east, and in asia. There are very few countries growing. Most countries are not. We must restore growth and prosperity. And then lift those spirits as best we can. We will devote our g7 efforts toward that. Toee it more as going back oldfashioned supplyside incentive oriented larry kudlow, thank you very much. Watch cspan today at 6 50 pm, a conversation with speechwriters for bill clinton, george w. Bush, and barack obama. One of the things that irks me is when people think we are wordsmiths. We are part of a policymaking policy comes to life unless it is written down or spoken. Especially by the president. At eight, abortion advocates and opponents discuss roe v. Wade in philadelphia. We are at the point where i dont think the current justices will be as brave as justice kennedy. Myully predict, unlike adversary, this court is prepared to overrule roe. Today on cspan. Cspans 2020 coverage continues. Live thursday at 1 30 p. M. Eastern with candidate cory booker from the university of New Hampshire law school. Watch live on cspan. Or listen live on the free cspan radio app. The u. S. Chamber of commerce recently looked into the future of the space economy. In this portion, asset and Space CommandOfficials Join contractors on what it will take to get people willing to work on mars or alert or other locations in space