Lawrence Summers on the Fallouts of the Government Shutdown

CHRISTIANE AMANPOUR: OK. So, that whole lead up about the crisis, the government shutdown, but the big, big picture, of course, is the global economy and that’s where you come in. What is your prediction for what the negotiators have been doing up until now?

LAWRENCE SUMMERS: Look, I think they have probably been clearing away underbrush in the negotiation. I’m sure they have resolved some issues. I’d be very surprised if they had resolved all the issues. It’s got to be better that people are talking. It’s got to be better that people think it’s worthwhile to continue the negotiations. I think the prospects are good but not certain, that some kind of agreement will be reached before the March 1st deadline, but let’s not be confused. The real issues, the question of whether the United States and China, two countries with vast economic, vast political power can and happily co-exist in the world, that’s a question that’s going to be defining international affairs for decades to come. And even if we resolve this trade dispute, there’s a great deal that’s ahead of us and one has to say that the degree of truculence that has been observed, particularly on the American side, is troubling.

AMANPOUR: Let me ask you, because we’ve seen with the wall and all the facts and counter facts, I mean, what the administration is saying about the wall and not borne out by the facts. And what the president started to say at the very beginning of his administration that trade was a good, that they are easily winnable, that we will win seems to have sort of also boxed him in. But here’s what he said on Friday just as this round of trade negotiations is going to get underway.

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DONALD TRUMP, U.S. PRESIDENT: China is not doing well now and it puts us in a very strong position. We are doing very well. But we’re taking in billions and billions of dollars and I hope we’re going to make a deal with China. And if we don’t, they are paying us tens of billions of dollars’ worth of tariffs, not the worst thing in the world.

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AMANPOUR: So, I mean, there’s a lot to unpick that this whole issue, he says China is doing badly, I think he implies worse than the United States in this trade war, that gives him a very strong bargaining position, a strong negotiating hand. What do you make of that?

SUMMERS: What he said was mostly a melange of confusions. To start with, we’re taking in billions of dollars from American consumers and American businesses who are paying higher prices because of our tariffs. It’s Americans who are paying these tariffs not the Chinese.