DR. NAVARRO INTERVIEW ON BLOOMBERG – 07.11.2025

TRANSCRIPT – DR. NAVARRO INTERVIEW ON BLOOMBERG – 07.11.2025

KAILEY LEINZ: We begin this evening with the President’s latest tariff threats. And joining us live for more, right here in our Washington bureau, Peter Navarro, White House Senior Counselor for Trade and Manufacturing. Welcome back to Bloomberg TV and Radio, Peter. It’s good to see you.

DR. NAVARRO: Kailey, it’s great to be with you and Joe.

LEINZ: When we consider the remarks the President made to NBC yesterday, suggesting most of our trading partners could see a tariff rate of between 15 and 20 percent being implemented, was that the President just riffing, or should we expect that the baseline 10-percent rate currently in place is going to go higher?

DR. NAVARRO: The baseline way to think about this is to look at the original levels of reciprocal tariffs. And the letters that have just gone out, where the President has lifted the tariffs from the 10 percent to a higher rate roughly track what the reciprocal rates were originally. Some are a little lower, some are a little higher, but the problem, Kailey, that this country faces – and it is an urgent national emergency – is we run this massive trade deficit every year to, cumulatively, it’s been like $18 trillion deficits over the last several decades, and that represents a transfer of our wealth abroad, it represents a transfer of our factories and our jobs. So, the process now for investors I think, is working quite well. People talk a lot about ‘uncertainty,’ this kind of thing like that. I think it’s pretty clear where we’re going. It’s an ongoing negotiation, we’ve had every major country in the world, and a lot of the smaller ones, come to us, and they’re fully engaged in negotiations. We’re getting to a place, but what we’re learning is that the more a country takes advantage of us, the less willing they are to give up the good thing they got going. So that’s the tension. But the President is not going to tolerate that. So, that’s where we’re at. I would say that, for the American people, these tariffs are a great boon. I brought a chart here, it shows that we’ve already collected like a hundred billion dollars in tariffs alone.

JOE MATHIEU: Yeah.

LEINZ: A record for a single fiscal year.

DR. NAVARRO: Yeah. And one of the things that really bothers me is that we’re up to 18 billion dollars now, or so, with China alone on the fentanyl tariffs. And so, they’re willing to give us 18 billion dollars in tariffs and they still won’t do what they promised back in 2019, directly from the president of China, which is to stop killing Americans. So, the tariffs are working. And they were a – these kind of revenues that we’re getting, it’s a very important part of the Big Beautiful Bill in terms of financing that, as well. So, we’ve got an External Revenue Service that’s going to augment the Internal Revenue Service, and we’re moving for a structural reset of the international trading environment, which by any measure is skewed against us. I think we –

MATHIEU: When you talk about killing Americans, you’re referring to fentanyl here, right?

DR. NAVARRO: I’m referring to fentanyl, yes.

MATHIEU: Because you spoke passionately about fentanyl, the scourge of fentanyl, last time you joined us.

DR. NAVARRO: Yes.

MATHIEU: Specific to Canada and Mexico at that point –

DR. NAVARRO: And, as well, China.

MATHIEU: Also China.

DR. NAVARRO: China, yeah.

MATHIEU: But with Canada now with a 35-percent tariff threat, I’m just wondering, as a point of clarification –

DR. NAVARRO: Yes.

MATHIEU: Because I can see what you’re pursuing here, and you’ve made the case for this, does that come with a USMCA carve-out?

DR. NAVARRO: Yes. Absolutely.

MATHIEU: Would that be extended to Mexico, as well?

DR. NAVARRO: No, the 35-percent tariff is not on USMCA. Okay?

MATHIEU: Got it. Even beyond –

DR. NAVARRO: And, I mean, let’s talk candidly about Canada. I think the – going back to, again, President Trump’s first term, I remember in the very first days of the administration, Bob Lighthizer, Wilbur Ross, myself, were negotiating directly with the Canadians, many of whom are still in charge of their trade policy. And we were in negotiation with both the Mexicans and the Canadians, and the Mexicans were a pure joy to deal with. You know, they were tough negotiators, but they were reasonable, fair negotiators. The Canadians were very, very difficult, and they’ve always been very difficult, and I think what the Canadian leadership needs to understand, as opposed to the Canadian people, which we love, is that this – waving this big bat of retaliation at the United States of America – I mean, no. They shouldn’t be doing that kind of thing. They just don’t have the weight in terms of any advantage they might have at us. So, I would just urge Canada to – the Canadian citizens to urge their leaders to negotiate fairly with us because, look, every country that we’re negotiating with, it’s just a fact, they have higher tariffs than we do. They have bigger non-tariff barriers. And we run these massive trade deficits with many of them. How does that happen if trade’s fair? It doesn’t. So, that’s all we’re –

LEINZ: Okay.

DR. NAVARRO: President Trump, going back to the eighties has promised to correct this.

LEINZ: Well, of course it’s not just about country by country, it’s also sector by sector. The President suggested this week that we could see a 200-percent tariff on pharmaceuticals, for example, but that could be on a longer time horizon, a year-plus out to allow supply chains time to reorient themselves toward the United States. Could we see a similar delay in other sectors that there are Section 232 investigations into, like semiconductors, for example?

DR. NAVARRO: Well, let’s talk about the Section 232. Because that, there’s a – there are a number of different ways that the President has the legal authority to raise tariffs. Section 32 – 232 – basically goes on the presumption that if imports are basically putting American capacity out of business in a way which harms the United States, he has the right to offset that. So, whether it’s steel and aluminum or whether it’s copper where we just made a major announcement on that, or whether it’s pharmaceuticals, the end game for the 232 tariffs is to strengthen our defense industrial base, our manufacturing base, and in the case of pharmaceuticals, our health industrial base. I – again, as a veteran of the first Trump term, I was the guy, the Defense Production Act Policy Coordinator who was in charge of getting all the medicines and the PPE and getting the vaccine thing jumpstarted and all of that, and we learned some very harsh lessons there. Certainly, there was just incredible rhetoric from China at one point, where they were going to ‘drown us in a sea of virus’ and withhold things from us if we dared say that the virus was from the Wuhan Lab. I mean, that’s out there. Just go look at that. But – but it was also true that every one of our ‘allies,’ when push came to shove, they weren’t with us. So, it was every nation on their own. So, we learned pharmaceuticals are particularly critical to have onshore for national security purposes.

MATHIEU: I want to get to Jay Powell with you.

DR. NAVARRO: Sure.

MATHIEU: And I want to try to do it this way. Because I heard you talking recently about the Big Beautiful Bill that the President just signed into law.

DR. NAVARRO: Yes.

MATHIEU: There have been questions about whether it adds to deficit and debt. And you have said just the opposite. That combined with tariff revenues, you will turn two to three trillion dollars in deficit spending to a two- to three-trillion-dollar surplus.

DR. NAVARRO: Yes.

MATHIEU: That would be a big deal. Can you do that?

DR. NAVARRO: Let me walk you through –

MATHIEU: Without Jay Powell cutting interest rates?

DR. NAVARRO: Well, that’s – yeah, we could do it without Jay Powell cutting interest rates because the numbers are so overwhelming, okay?

MATHIEU: Does it take you longer?

DR. NAVARRO: But Powell, I mean, let’s not conflate those two. Let me talk first about the Big Beautiful Bill economics. It’s fairly straightforward. The way it works is there’s this thing called the Congressional Budget Office.

MATHIEU: We talk about it a lot around here.

DR. NAVARRO: When – yeah, I’m sure. When you do a bill like that –

MATHIEU: Yeah.

DR. NAVARRO: – it’s the CBO that does the official forecast.

MATHIEU: Sure. And you want dynamic support.

DR. NAVARRO: And historically, they’ve just been far more wrong than right, dating back to the first, first term. And so, all you’ve got to know about the CBO forecast this time around is that it assumes a 1.8 rate of economic growth, which we think is way too low. And from that 1.8 – and they don’t put in any dynamic effects to speak of, and when they tried to do that, they screwed that up too, whatever. They came up with a two- to three-trillion-dollar increase in the debt. Okay? It’s like, no, wait a minute. Here’s what you’re not doing. Two things. One is that if you simply increase the growth rate by one percent like we did in the first term – CBO got it wrong the same way in the first term – you erase a couple of trillion of dollars of that, so you get almost to zero, okay, you get to neutrality, and they didn’t count the tariff revenues. And that’s like, that’s a trillion or more.

LEINZ: Because they’re coming from the Executive Branch, not from Congress. They can’t, technically.

DR. NAVARRO: Oh, but they should have counted it because it counts towards the debt, I mean, look at it. [Holds up tariff revenues chart] 100 billion dollars in – I don’t know – the first six months. We’re gonna – we’re gonna have a situation where if you simply do the numbers right from the Big Beautiful Bill it’s a significant reduction in the debt. And what that’ll do – if you want to segue to Jay Powell – what that’ll do is it’ll actually lower yields and interest rates because we’ll have to finance less. Now, with respect to Powell, I think there’s a strong argument that can be made that he’s at least 50 basis points above where he should be. We should be at a place where we should be 50 basis points lower now, moving towards even lower. And let’s just deconstruct what 50 basis points too high means. That’s about a quarter to a half-point of GDP growth reduction. And that, in turn, means about 500,000 to 750,000 fewer jobs that we’ll create because of Jay Powell. It’s a couple of hundred billion dollars in lost output and there’s billions lost in tax revenues.

MATHIEU: Mm-hmm.

DR. NAVARRO: Then when you go from there, and I was watching Lael – I’m sure you have Lael –

LEINZ: Brainard.

DR. NAVARRO: – Brainard.

MATHIEU: Yes.

DR. NAVARRO: I saw her on the other network yesterday. And she has no clue. It’s like, she was talking about the Big Beautiful Bill and Powell and all of this stuff. But 20 to 30 percent of our debt is financed by short-term debt. That’s the way they roll that.

MATHIEU: Mm-hmm.

DR. NAVARRO: So, if you look at a half-point more on the short-term debt, that’s a couple hundred billion dollars that should build into the debt over 10 years. That’s real money. Mortgage rates – average family, 400,000-dollar, 30-year mortage – that’s a thousand, over a thousand dollars a year. And then, we’ve got – this is the last point – a trillion dollars of revolving credit card debt. That’s about five billion dollars more than consumers pay. So, this idea of why – what’s wrong with waiting? I’ll tell you what’s wrong with waiting. All of those costs. And what’s wrong with lowering them now, and if you get it wrong, inflation heats up, just put it in reverse. We used to do that.

LEINZ: Sure.

DR. NAVARRO: Fed policy used to be uncertain by design to keep the bond market and everybody else with discipline. We’ve got this, like, weird concept now where we’ve got to telegraph a year in advance what that is. It doesn’t work.

LEINZ: Well, and – but with the bond market, it’s not so much the Fed funds rate, it’s the bond market that dictates things like mortgage rates and overall borrowing costs. Is there a risk that public pressure on the Fed chairman when he does cut, then creates a credibility problem for the Fed, the bond market no longer trusts the Fed, and you still run into these same problems of higher rates?

DR. NAVARRO: No, I don’t think there’s any risk at all of that. I think the bond market, frankly, thinks Jerome Powell’s a clown at this point because of what he did. And I can go over the three major mistakes he makes. But the bond market will do what the bond market does, seeing the data. And when you see 10-year yields going down significantly like they have been doing, that should tell Jerome Powell that the short-run rates should be coming down significantly.

MATHIEU: Yeah.

DR. NAVARRO: And that’s not happening. And let me just – on the Powell thing, let’s be clear. It’s like, this op-ed I had in The Hill basically looked at all the Fed chairmen we’ve had over the last, I don’t know, 40 years, and ranked them. Who was good, who was bad.

MATHIEU: You say he’s in a race to be the worst.

DR. NAVARRO: And there’s an argument that he was the worst. And if you look at, like, Arthur Burns, ’72, helps Nixon get reelected, sets off the stagflation.

MATHIEU: Yeah.

DR. NAVARRO: G. William Miller is in the middle of that mix, sits on his hands. He was the other lawyer in the mix besides Powell. Totally unqualified.

MATHIEU: You went through Greenspan, Bernanke, Volcker –

DR. NAVARRO: You had Greenspan getting – not understanding how the dotcom was going to bring productivity and allow you to go forward without inflation.

MATHIEU: Yeah.

DR. NAVARRO: But Powell has made three major blunders. In the first term, he raised rates too fast. He was like ‘Too Early’ Powell. And that’s been documented by the Fed itself. He made a mistake.

MATHIEU: Right.

DR. NAVARRO: Then the second term, this is what – and you folks were right here on this set. And I wonder why you might not have been asking about Jay Powell, ‘Hey Jay, are you going to say anything about all these bills that pass and contribute to inflation? Jay, why are you waiting to raise interest rates?’

LEINZ: Well, his job is monetary policy, not fiscal policy.

DR. NAVARRO: No, no. But – no. Actually, I’ll give you my favorite Fed chair besides Paul Volcker, William McChesney Martin. Most famous quote in Fed history is, ‘The job of the Fed chair is to take the punch bowl away before the party gets too good.’ Right? And what – but what McChesney Martin did – which was so profound – when Lyndon Johnson was prosecuting the Vietnam War and refusing to trade off guns for butter, McChesney, he – McChesney Martin started raising rates. And LBJ demarched him down to his ranch and tried to read him the Riot Act, and Martin said, ‘No, you’ve got to choose one or the other.’ And so, Powell should have said a lot during that time. He didn’t, and one of the reasons was he wanted be reappointed to the Fed. He’s a political animal. Let’s be clear about that.

MATHIEU: They’re wrapping me. This is the longest interview we’ve ever done on this show, I want you to know. Peter Navarro. Before you go –

DR. NAVARRO: [Applauds] All right, let’s give a hand to Kailey here.

MATHIEU: Let’s absolutely hear it for Kailey. Do you want to fire Phillip Swagel or Jay Powell, before we go? Or is it both?

DR. NAVARRO: I don’t fire anybody.

MATHIEU: Okay.

DR. NAVARRO: I just report the facts here, and I just love coming to your studio, so –

MATHIEU: Well, let’s keep this conversation going.

DR. NAVARRO: Yeah. Absolutely. I appreciate –

MATHIEU: We appreciate you coming over from the White House.

DR. NAVARRO: [Pointing to Kailey Leinz, apparently in the late stages of pregnancy] And we’ll have another baby on the planet –

LEINZ: [Laughs] That’s right.

DR. NAVARRO: – when I come back. Congratulations.

MATHIEU: Absolutely.

LEINZ: Thank you.

MATHIEU: White House Senior Counselor for Trade and Manufacturing, Peter Navarro, we thank you so much for being with us on Bloomberg.