Greta Van Susteren: Senator, Nice to see you sir.
Sen. Charles Grassley (R-Iowa/Finance Committee Chairman): Always nice to see you. I remembered so many times in your previous life you've interviewed me so many times.
GVS: I know so many different places and about so many different topics. Today I want to talk about tariffs. You don't typically like tariffs do you?
CG: The answer is no because I have seen what reductions of tariffs has done throughout the world since World War Two. 50% of the world was in poverty today less than eight percent are in poverty and people are speculating that within a year or two by the rules of different state countries that what's middle class that half of the world's going to be middle class. That's quite an accomplishment in 70 years.
GVS: The tariffs are hurting farmers back in your home state of Iowa. In fact you're a farmer you're the only, I think, active farmer in the U.S. Senate. What do you make of the tariffs affecting Iowa farmers?
CG: Well I think you'd have to look at a little bit differently from China versus let's say Mexico and Canada. Now of course the tariffs are off for Mexico and Canada. And the president, when the Congress passes this, will have a big victory and give him a great deal of credibility. He's also been successful with South Korea. He's been successful with Japan getting beef in there, it looks like we'll have an agreement with Japan generally, getting pork into Argentina. So he's had some victories. But the big 900-pound gorilla is China and it's very difficult to predict what China is up to when they reached an agreement on most everything. And then in the last two weeks they backed off and we're hoping to get China back to where they were and get a settlement. But China doesn't have to sit down with us if they don't want to. So the tariffs are there and the farmers are hurt by the tariffs. But those same farmers know that China has been cheating for two or three decades, not following the rules of trade according to the World Trade Organization. They've been a member for 20 years. And they just aren't living up to their obligations.
GVS: China insists it's not going to back down. I don’t know what China's going to do or the U.S. is going to do. But in the meantime, the president has said that he's going to take $16-billion revenue from the tariffs and and I guess subsidize the American farmer.
CG: And that's been done more than once. Going back to the Carter years when he had a grain embargo because of Russia things like that the farmers can't do much about what the government does. If it hurts them it hurts them. But we've had stepped in with some help in decades over the past few years or past few decades. And we welcome it but it isn't the ideal way to farm. The ideal way to farm is to build markets and trade and not have aid.
GVS: If the 16 billion is used to help the American farmer does the United States use that 16 billion to purchase the farm goods? Is that what it does or is it just essentially give money to the farmer?
CG: Mostly the latter but a little bit of the former because there's some ways that.. there's some parts of agriculture probably more garden type agriculture. But I mean not in the big operations in California is an example, buy up and then put into the government food program. But for corn soybeans and wheat that isn't feasible, so then, a check directly to the farmer.
GVS: So what happens to the corn that they are harvesting, the soy that if they can't sell it to China and they're going to get compensated by the U.S. government in some form one of this 16 Billion. What happens to that food?
CG: Well first of all, there's always some carry over from year to year and there's more carryover now not because of the tariffs just because in the last three or four years we've had massive overproduction. So some of the downturn in prices is related to that. How much is related to tariffs? Obviously some particularly. with soybeans, but it's pretty hard to quantify. But eventually it is used up. I mean it just isn't stored for 10 years you know?
GVS: Is there's any possibility that we would ship it off to another—we give a lot of humanitarian aid around the country for instance and we help out in the African continent. Any chance any of the surplus that is not purchased because of the tariffs that the American farmers would be shipped off in humanitarian
CG: It will be, Yes. But you got to do it for just humanitarian reasons. You just can't ship grain to someplace where anywhere you want to subsidize product because then we're violating the rules of international trade and we would be subject to fine by the World Trade Organization.
GVS: How long could this tariff spat, or war, with China last?
CG: Well I hope. Let me say I hope it's what our Ambassador Lighthizer has said recently that he is willing to drop everything right now and go to Beijing to do more negotiations. If China will come back to a position where they were just prior to the latest breakup
GVS: And if they do not. If China does not?
CG: It's difficult to predict. And in fact President Xi was sending just the opposite signals. He went to some place in China where the long march of the Communist take-over China started in 1934 and he used those same words, we're on a long march of tariff or a long march of trade issues with America. So maybe maybe that's just…you know just trying to scare America but that isn't going to happen.
GVS: Well we have two leaders who seem to be doing a stare down President Trump and President Xi. They both seem pretty entrenched in their positions.
CG: I know -
GVS: That can't be good.
CG: Trump knows that we are only sell to China about one fourth of what they sell to us. And if they want the United States to be a market, and it is a big market for them, they have less staying power than we do.
GVS: China has been buying some of their farm products for instance from Argentina from some countries in South America. Is it likely that the U.S. farmers could lose their market over time? Could the China find a better source ?
CG: As of now, no. But if this went on for two or three years or maybe even shorter period of time that the answer to your question would be, yes.
GVS: What's the impact on the global economy? This between China and the United States.
CG: All I can say is this. I'm not really answering your question because I don't have a percentage to answer for you but I know this: America and China 1 and 2 and the, big in the world economy. It’s to our benefit and their benefit to get together. But the whole world is my benefit and we ought to be thinking about the whole world. As we put America first. China can be second. Maybe someday China will be first in the economy but whether we're one or two us working together is not only to make the life of Chinese and Americans better, it's and make the lives of a lot of people on the world a lot better.
GVS: Has the President consulted you? Because I would think you would consult you both because you're a farmer and have the experience but also your chairman of the Finance Committee. Is he talking to you?
CG: Yeah, I think we've had meetings at the White House five or six times in the last year or so. And very recently two meetings on auto tariffs on China and on the U.S./Mexico/Canada. And you Leave the meeting as if you have accomplished nothing. But then you hear a week later from this cabinet person or this cabinet person that we made our point and it's going to make a difference. And so let's say two weeks ago maybe it’s been three weeks ago right now we had that meeting. We left it. The cabinet people said you made your point it was heard we're going to get results from it. And two weeks later the tariffs are off
GVS: But the tariffs were off in terms of Canada and Mexico and many people thought that was because it was it because we're going into an election cycle and that he was worried about you know about votes that he lifted those two. You don't think that?
CG: If he's or if he's interested in election the most the election he should be interested in is the election in Canada in October because they're gonna leave in October 25th or June June 25th for the election and it's got to get through Canada yet in June. That's what he should have been thinking about if he's thinking about election
GVS: Revised NAFTA. is that going to get passed?
CG: Yes.
BVS: President Trump wants this revised NAFTA. Why do you say that so affirmatively?
CG: OK. Number one Canada is going to pass it in June. Mexico will pass it just soon as they get their Senate back together. Number three, the Congress did not have to take a position on it when Trump was holding it up. Trump’s not holding it up now, so the pressure is on the House of Representatives and on Pelosi to move. Up until now, there's been no discussion, but there are groups of people that are democratic representatives, sitting down, negotiating with the White House on things like terror they think need to be changed like labor enforcement and environment. And to me that's very positive. I've had discussions with people on the Ways and Means Committee in the House of Representatives. They're very positive and I even heard one of them say to me Pelosi wants to get to yes
GVS: Speaker of the House Pelosi wants to get to yes, the president wants to get to yes, but I think people around the world watching this interview are going to wonder about the disagreement lack of better word between Speaker Pelosi and President Trump President Trump says until investigations and he's not going to do business with the house.
CG: Well. Don't forget the executive branch of one three branches of government. It's it's up to Congress now so the president doesn't have to be involved except, there's got to be some changes. But if if the president want to make these changes I want to get them changed. As chairman of the Finance Committee I'll work that out with Pelosi if I have to.The president can stay out of it
GVS: and you have a good relationship with her.
CG: Pretty good.
GVS: Pretty good? Senator, nice to see you.
CG: Thank you