- 2025-02-04
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
MARIA BARTIROMO: It is time for the hot topic of the hour, as President Trump prepares to talk with Xi Jinping—potentially as soon as today. Beijing has announced retaliatory tariffs on the United States beginning February 10, after President Trump’s 10% import tariff on China went into effect at midnight last night. China’s plan includes a 15% tariff on US coal and liquefied natural gas, a 10% tariff on crude oil, agricultural machinery, and large vehicles, as well as export controls on key rare minerals. It will also open an antitrust probe into Google a month after doing the same to Nvidia. Meanwhile, Trump is striking deals with both Canada and Mexico to pause his 25% tariffs for 30 days. Prime Minister Trudeau has agreed to put Canada’s $1.3 billion border plan into effect—sending upwards of 10,000 troops to the northern border. He will also create a fentanyl czar position, list cartels as terrorists, and launch a joint Strikeforce to combat organized crime. Mexico’s President Scheinbaum has also vowed to send 10,000 troops to the border and promised cooperation with key American cabinet officials. Trump also hinted yesterday that the European Union could face tariffs. Next, watch:
PRESIDENT TRUMP: We have massive deficits with the European Union—massive, like 350 billion, if you can believe it. They don’t take our farm products; they don’t take our cars. They don’t take almost anything, but we take their cars. We have millions of cars coming in. We don’t charge them tariffs. They make it impossible to sell cars in the European Union. They make it very difficult for our agricultural products. They actually don’t take them, and they have a lot of excuses.
MARIA BARTIROMO: So it looks like the expectation is for tariffs on Europe to start mid-February. Samantha, your reaction?
SAMANTHA DAVIS: Well, what we’re seeing right now is really the art of the deal in real time. President Trump has made it clear that these aren’t tariffs just for the sake of tariffs. There’s a broader strategy at play here, and it has to do, first and foremost, with resetting the table regarding how America is treated and ensuring fairness. So whether you’re a friend, ally, neighbor, or adversary, America is going to demand to be treated fairly. In just 24 hours, President Trump was able to accomplish more than has been done in the last four years. He’s also made it clear that this is not just a trade war—it’s a drug and crime war. With respect to Canada and Mexico—Mexico in particular—they have a very troubling relationship with the cartels, and they need to do more to secure their side of the border in this drug and crime war.
MARIA BARTIROMO: Yeah, and that’s exactly what I said first thing out of the gate yesterday. This is a drug war, not a trade war, because I know President Trump doesn’t want to start a trade war, but he does want reciprocity and wants the United States to be treated fairly. He also signed an executive order yesterday to create the first-ever US Sovereign Wealth Fund, with a suggestion as to what could be the first purchase. Watch this.
PRESIDENT TRUMP: We’re going to have a sovereign wealth fund, which we’ve never had. We have a lot of things that create wealth. As an example, TikTok—we’re going to be doing something, perhaps with TikTok and perhaps not. If we make the right deal, we’ll do it; otherwise, we won’t. But I have the right to do that, and we might put that in the Sovereign Wealth Fund.
MARIA BARTIROMO: Well, they’ve got a lot of issues with China. This conversation with Xi Jinping will be important, Cheryl, and I don’t know that China is going to want to go all in on taking Trump to task, because that economy is weaker than anybody understands, and Xi Jinping is weaker than people know. So we’ll see how much Xi Jinping wants to take this to the mat.
CHERYL CASONE: Well, the Sovereign Wealth Fund idea, I think, is very interesting and intriguing. But on the China front of this—absolutely, Maria, you mentioned that yesterday, and you’re spot on: their economy is weakened, and Xi Jinping is weakened. On the heels of that, what the Commerce Ministry did overnight—I mean, you mentioned the broad tariffs on LNG and oil, etc.—but what I thought was interesting is that the Commerce Ministry added several metals and metal-based products to a list of export control actions. These items are used in industrial machinery, aerospace, and military applications. And now we know that they supply Mexico with the chemicals for fentanyl, but they could also hurt us in this way. So I think that there is going to be a very nuanced, very deep conversation between President Trump and Xi Jinping. There has to be one.
MARIA BARTIROMO: Treasury Secretary Scott Bessant and Commerce Secretary Howard Lutnick are leading that project regarding the sovereign wealth fund. It’s unclear how the fund will be capitalized, but Trump has previously pitched using tariff money. The largest sovereign wealth funds in the world are owned by Norway, China, Hong Kong, and the Emirates. And the view this morning from TD Coen is the following: We do not see how the Treasury can fund a sovereign wealth fund while it is using extraordinary measures to prevent the United States from defaulting on its debt. Of course, Treasury is tapping all available pools of cash to ensure the United States can pay its bills, and diverting funds from this to a sovereign wealth fund could bring forward the so-called “X date” when the US technically defaults on its debt. So that’s also something to think about. Scotty Martin?
SCOTT MARTIN: Yeah. Aren’t we waiting for this default on the debt every year, every month? I mean, when is this going to stop? How do you expect the Treasury to pay for this? We’re the wealthiest country in the world. We have the money to do it—oh, by the way, we have the world’s reserve currency. So what if we print more of it to pay for it or to fill up that wealth fund? Because, guess what? We can invest money in companies or projects that the government wants to support, and that can grow the fund itself once it gets going.
MARIA BARTIROMO: Yeah, no—I love the idea of a sovereign wealth fund. I certainly do.
SCOTT MARTIN: I’ll put in the first dollar. How about that? Maybe that’ll get the naysayers going.
MARIA BARTIROMO: But where’s the dedicated funding coming from? Analysts at TD write that a true sovereign wealth fund would likely need a dedicated funding source—like fees paid to the government for oil and gas leases. Maybe that’s where Trump is going with this. The Treasury might also find a way to use the proceeds from selling stakes in Fannie Mae and Freddie Mac as a way to generate funding. We see funding as most stable if Congress authorizes it; otherwise, there could be legal action to block the investments. So there are lots of questions about how this will work. We’re going to get into it this morning.
Check out the rest of this episode with Scott Martin by clicking here
