Squawk on the Street+ Top Trade Advisor Peter Navarro 2/12/25

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Carl Quintanilla (0:59)

President Trump's trade advisers reportedly finalizing plans today for reciprocal tariffs that Trump said he would impose on any country that charges duties on US imports. Let's get the latest from Peter Navarro, White House Senior Counselor for Trade and Manufacturing. Joins us live from Washington. Peter, it's great to see you. Welcome.

Peter Navarro (1:17)

Great to be back. I'm just wondering, is Cramer like going to spend like a week in the big, easy celebrating the Eagles? I mean, what the deal?

Carl Quintanilla (1:25)

Probably. Come on, buddy. He gets a vacation. He can get one vacation, but he is probably in celebration. It's also his birthday week. Peter, what can you tell us about, what can you tell us about the reciprocal tariffs? Where are you on that?

Peter Navarro (1:39)

I can tell you why the president might act. I can't tell you when. That's not my job to break that kind of news here. But the reciprocal issue really goes back to the first term. The president had the Reciprocal Trade Act up in front of Congress. He's been talking about how governments and nations around the world stick it to this country. The central idea here is that you have the US with the lowest tariffs in the world and, importantly, the lowest non-tariff barriers, what the president likes to call non-monetary barriers. And that's not fair. And the notion here is that, in the first term, was that if they won't lower their tariffs to ours and their non-tariff barriers, we're going to raise ours to theirs, or vice versa. It's the most common sense thing in the world. And if you just go around the world, you have India. India is a maharajah terrorist. They have some of the highest tariffs in the world. The EU particularly has a VAT tax, a value-added tax, and it's not well understood that that acts... It's like a two-punch. When they're sending us stuff, it acts as an export subsidy. When we're sending them our stuff, it acts as a tariff.

And the net result is, we don't sell any cars there. And then, of course, you got the problems with all the other countries around the world. So reciprocity, President Trump has embraced that, going back to the first term, is his philosophy.

Carl Quintanilla (3:22)

I get the issue of fairness, especially on places that haven't been fair to us on trade, Peter. Question is, though, if it's going to have a damaging effect on business, business confidence, business spending, business planning, because they've been doing business this way for a long time, and now there's great uncertainty about higher costs, potentially, of imports that they would have to pay, changing their cost structure, and also potential more reciprocal or retaliatory tariffs once we do this.

Peter Navarro (3:55)

I think you have to step back and look at the broader structural readjustment we're having, the whole global environment here. The birth of the external revenue service is going to take us back to a future that looked a lot like McKinley and Jefferson and Hamilton, where this country prior to 1913 relied almost exclusively on tariff revenues, and we prospered and our nation was secure. And what the president Donald John Trump wants to do is get to that kind of world, and it's going to be a great world. If you look just micro at what happened this week in the steel and aluminum tariffs, we've seen billions of dollars added to the market cap of companies collectively, New Corps, Cleveland Cliffs, US Steel, Century Aluminum.

And we expect not only those companies to prosper as they did back in the first term, but we're also going to see a lot of investment come, both domestically and from abroad, to come inside the perimeter of the United States to be able to produce. So this is, it's an evolution.