NOW FOR A CONVERSATION ABOUT THE STATE OF THE US ECONOMY, PLEASE WELCOME US DEPARTMENT OF SECRETARY TREASURY JANETELIN AND RON BROWNSTEIN IS LEADING THE CONVERSATIONCONVERSATION.

>> MADAM SECRETARY SO GREAT TO BE WITH YOU AGAIN.

>> PLEASURE.

>> YOU ARE ALSO IN ADDITION TO CURRENT ROLE A FORMER CHAIR OF THE FED AND FED YESTERDAY MADE LONG AWAITED DECISION TO CUT INTEREST RATES WHAT DID YOU MAKE OF WHAT THEY DID?

DID THEY GO FAR ENOUGH?

>> WON'T COMMENT ON DETAILS OF THEIR DECISION BUT WILL SAY I SEE THIS AS A POSITIVE SIGN WHERE THE US ECONOMY IS AND IT REFLECTS CONFIDENCE ON PART OF THE FED THAT INFLATION HAS COME WAY DOWN WAY DOWN AND MEANINGFULLY DIMINISHED AND HAVE A JOB MARKET REMAINING STRONG AND OVERRIDING CONCERN OR MOTIVE TO TRY TO MAKE SURE IT STAYS STRONG.

MONETARY POLICY HAS BEEN TIGHT AND READJUSTING STANCE OF MONETARY POLICY AND PRESERVING STRENGTH OF LABOR MARKET WHEN INFLATION HAS COME DOWN IS WHAT THIS DECISION SIGNIFIES.

>> DOES THAT IMPLY THIS SHOULD BE FIRST OF SEVERAL?

>> I THINK THAT THE STANCE OF MONETARY POLICY REMAINS RESTRICTIVE AND CHAIR-POWELL SAID YESTERDAY THAT AND WE SAW IN PROJECTIONS BY FOMC PARTICIPANTS THAT THE EXPECTATION IS THAT INTEREST RATES WILL COME DOWN FURTHER.

IT IS, OF COURSE, NECESSARY TO WATCH INCOMING DATA.

THERE COULD ALWAYS BE SURPRISES.

>> LAST TIME WE WERE ON THE STAGE IN 2022, THERE WAS A GREAT DEAL OF APPREHENSION ABOUT THE ECONOMY AND BIDEN ADMINISTRATION'S MANAGEMENT ABOUT THE ECONOMY AND NOW TWO YEARS LATER EMPLOYMENT AND INFLATION AND FED FINALLY CUTTING INTEREST RATES AND TAYLOR SWIFT HAS BEEN IN THE NEWS A LOT LATELY I LET ME ASK YOU, ARE WE OUT OF TH >> THERE ARE ALWAYS RISKS TO THE ECONOMY AND WANT TO AVOID BEING OVERCONFIDENT HERE.

WHEN WE SPOKE TWO YEARS AGO, WHAT I SAID WAS I BELIEVE THERE WAS A PATH TO BRING INFLATION DOWN IN THE CONTEXT OF A STRONG JOB MARKET.

IF THE FED AND ADMINISTRATION'S POLICIES COULD SUCCEED IN ACCOMPLISHING THAT WE CALL IT A SOFT LAND ING.

I BELIEVE THAT IS EXACTLY WHAT WE ARE SEEING IN THE ECONOMY.

>> JUST TO BUTTON UP THIS POINT YOU THINK WE ACHIEVED A SOFT LANDING AND WON'T SEE UNEMPLOYMENT RISE UNACCEPTABLY OUT OF FEAR THAT THE FED WAITED TOO LONG.

>> I BELIEVE THAT THE JOB MARKET REMAINS STRONG AND UNEMPLOYMENT RATE HAS MOVED UP MEANINGFULLY, BUT FROM HISTORICALLY LOW LEVELS AND IS RARE TO HAVE IN UNITED STATES UNEMPLOYMENT RATE WITH FOUR AS THE FIRST DIGIT AND IS A GOOD AND STRONG LABOR MARKET THAT LOOKS LIKE THE LABOR MARKET BACK IN 2019 BEFORE THE PANDEMIC AND IS NOT AS HOT AS THE LABOR MARKET WAS A YEAR AND A HALF OR TWO WHEN FIRMS WERE UTTERLY STRUGGLING TO HIRE BACK EMPLOYEES THEY LAID OFF DURING THE PANDEMIC AND WERE HUGE SHIFTS IN DEMAND AND WAGES WERE RISING VERY RAPIDLY AND NOW WAGES ARE GOING UP AT A GOOD PACE AND FASTER THAN INFLATION AND WORKERS ARE GETTING AHEAD IN REAL TERMS AND WE ARE SEEING A NORMAL AND HEALTHY LABOR MARKET.

WE STILL HAVE POSITIVE JOB GROWTH IN THE ECONOMY.

I BELIEVE IT IS POSSIBLE TO STAY ON THIS COURSE AND THIS WOULD BE AN EXCELLENT OUTCO >> I WILL ASK YOU ABOUT TWO IMMEDIATE EVENTS IN THE NEWS.

ONE, HOW BIG OF A DISRUPTION TO THE ECONOMY WOULD IT BE IF THE GOVERNMENT SHUT DOWN AT THE END OF THIS MONTH WELL, I THINK IT WOULD BE VERY UNDESIRABLE the government to shut down that And, really, it would cause, dis in the lives of many people.

and it's utterly unnecessary.

So I truly hope that that is not something I know.

It's mostly beginning to happen.

I know it's mostly being handled and the white House, but do you see a pathway to keeping the government open?

I think that's an easy pathway to keeping the government open.

We need a continuing resolution, and we've achieved that in the p And I believe, I certainly hope it's something we will achieve a one more current event question.

President Biden has pretty clearly signale his opposition to Nippon Steel's acquisition of, of U.S. steel, citing national security You chair the committee that rev these kinds of international, economic, a deals.

I know, I know, the participants have apparently which starts the process.

Again, you can't talk about the At the high level, though.

This administration has talked about friend shoring from the be >> TALK ABOUT THE SPECIFICS HIGH LEVEL THOUGH THIS ADMINISTRATION TALKED ABOUT FRIEND SHORING FROM THE GIPING INTEGRATING SUPPLY CHAINS MORE TIGHTLY WITH ALLIED COUNTRIES WHY WOULD JAPAN BE A NATIONAL SECURITY RISK TO OWN A MAJOR AMERICAN COM >> I'M NOT ABLE TO TALK ABOUT THE SPECIFICS OF THIS OR ANY TRANSACTION UNDER VERY STRICT CONFIDENTIALITY RULES THAT GOVERN CIF I/O US BUT BELIEVE THAT FOREIGN TRADE IS BENEFICIAL FOR US ECONOMY AND WE FOCUSED ON DEEPENING TIES WITH TRADE AND INVESTMENT WITH A RANGE OF COUNTRIES THAT ARE FRIENDS TO DIVERSIFY SUPPLY CHAINS AND IN PARTICULAR TO REDU DEPENDENCE ON MILLIONS AND MILLIONS OF JOBS IN THE UNITED STATES AND FOREIGN FIRMS INVEST I BELIEVE 150 BILLION DOLLARS JUST LAST YEAR IN THE US ECONOMY.

I THINK IT IS CRITICALLY IMPORTANT TO HAVE AN OPEN AND WELCOMING ENVIRONMENT THAT IS ENCOURAGING FOREIGN DRIKT INVESTMENT IN THE UNITED STATES.

THERE COULD BE AND CIFIOUS'S JOB IS TO IDENTIFY IF THERE ARE ANY NATIONAL SECURITY THAT IS THE FOCUS IN THE LAW AND PROCESS THAT CIFIO SUSHGS -- >> IT IS THE COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES THAT TREASURY SECRETARY SHARES.

>> RIGHT.

>> I WILL ASK YOU ABOUT ANOTHER AREA AND KNOW YOU CAN'T TALK ABOUT SPECIFIC POLICIES OR INDIVIDUAL CANDIDATES IN THE PRESIDENTIAL RACE BUT IN AS MUCH IN YOUR LIFE AS AN ECONOMIST AND IN YOUR CURRENT JOB TREASURY SECRETARY I WANT TO ASK YOU ABOUT DEBATE ABOUT TARIFFS AND FUNDAMENTAL QUESTION ABOUT TARIFFS IS IT A FOREIGN COUNTRY PAYING THE TARIFF OR FOREIGN AMERICAN IF TARIFFS ARE RAISED IS IT AMERICAN CONSUMERS THAT HAVE PAID THE BILL.

>> RESEARCH ON THIS TOPIC AND ALMOST ALL SUGGESTS THAT PURCHASERS OF GOODS IN THIS CASE AMERICANS IF WE HAVE TARIFFS WILL END UP PAYING THE TARIFFS AND SEEING HIGHER PRICES FOR GOODS THAT THEY PURCHASE.

>> IDEA THAT AMERICAN CONSUMERS WILL BE HELD HARMLESS AND IS SOMEHOW BEING PAID BY CHINA OR EUROPE IS.

>> THAT IS GENERALLY NOT WHAT HAPPENS AND THERE HAVE BEEN MANY STUDIES THAT RIGOROUSLY DOCUMENT THAT.

>> A STUDY THE OTHER DAY CALCULATED THAT UNDOCUMENTED MIGRANTS ACCOUNT FOR 22% OF AGRICULTURAL WORKERS 15% CONSTRUCTION WORKERS AND 8% OF SERVICE WORKERS INCLUDING CHILD CARE WORKERS AND IN YOUR VIEW WHAT IS IMPACT REMOVING ALL OR MOST OF THEM IN ECONOMY IN SHORT TIME THROUGH PROGRAM OF MASS DEP >> I BELIEVE THAT IMMIGRANTS HAVE ALWAYS MADE AND CONTINUE TO MAKE A POSITIVE CONTRIBUTION TO THE US ECONOMY BETWEEN I THINK 2010.

>> AUDIENCE: [APPLAUSE].

>> WE HAVE AN AGING POPULATION PUSHING DOWN DRAWING LABOR FORCE PARTICIPATION AND BETWEEN 2010 AND 2018 IMMIGRANTS MADE UP I BELIEVE 60% OF ALL ADDITIONS TO THE LABOR FORCE.

THEY OBVIOUSLY CONTRIBUTE TO THE DYNAMISM OF THE US ECONOMY AND WE -- WE NEED I BELIEVE AN ORDERLY IMMIGRATION SYSTEM.

THERE IS OBVIOUSLY WORK TO DO FOR CONGRESS TO WORK WITH THE ADMINISTRATION TO ACCOMPLISH I THINK THAT IT WOULD BE DEVASTATING TO SIMPLY.

>> REMOVE.

>> REMOVE A NUMBER OF IMMIGRANTS >> WITH THAT THERE HAS BEEN A LOT OF DEBATE ABOUT WHETHER IT WOULD RELIEVE PRESSURE ON PRICES OR REMOVING WORKERS FOR CULTURAL OR.

>> IT WOULD REMOVE INFLATION AND WORKERS CONTRIBUTE TO AMERICA'S ABILITY TO PRODUCE MORE GOODS AND INCLUDING AGRICULTURAL GOODS AND INFLUX WE HAVE SEEN SINCE THE PANDEMIC THAT IS NOT ONLY THROUGH IMMIGRATION BUT ALSO WE ARE SEEING THE HIGHEST LABOR FORCE PARTICIPATION ON RECORD FOR ADULT WOMEN.

INFLUX OF WORKERS INTO THE LABOR MARKET IS SOMETHING THAT HAS HELPED TO BRING DOWN INFLATION AND CREATE A LOT OF JOBS.

>> THE BIGGEST FISCAL POLICY DECISION FACING NEXT PRESIDENT END OF NEXT YEAR TRUMP CUTS PASSED IN 2018 EXPIRE AND WALKING THROUGH DIFFERENT SCENARIOS IN YOUR VIEW WHAT IS IMPACT OF EXTEND ENTIRE TAX CUT AS IT WAS PASSED IN 2017.

>> ENTIRE TAX CUT IS JUST EXTENDED AND NOTHING IS ALLOWED TO EXPIRE, I BELIEVE THAT THE CONGRESSIONAL BUDGET OFFICE IS -- HAS ESTIMATED OVER 10 YEARS THAT WOULD BE ALMOST A 5 TRILLION DOLLAR BLOW TO THE OVERALL BUDGET DEFICIT.

HONESTY, I CAN'T BELIEVE THAT UNITED STATES CAN AFFORD AND WE HAVE TO BE ON A SUSTAINABLE FISCAL PATH.

IF WE EXTEND ANY TAX CUTS AND PRESIDENT BIDEN INVITES PRESIDENT HARRIS AND THEY HAVE SUGGESTED EXTENDING TAX CUTS THAT BENEFITED MIDDLE CLASS FAMILIES AND FAMILIES MAKING UNDER 400,000 DOLLARS AND INCREASING THE CHILD TAX CREDIT WAYS HAVE TO ABSOLUTELY BE FOUND TO PAY FOR THAT.

IN ADDITION WE NEED TO LOWER DEFICITS TO STAY ON A FISCALLY SUSTAINABLE PATH.

>> GIVEN THE PRESSURE ON DEFICITS THAT CBO SHOWS AND GIVEN WHAT YOU SAID BEFORE ABOUT AN AGING SOCIETY, WHAT IS THE CASE AGAINST LETTING THE WHOLE THING EXPIRE AND WHY EXTEND IT FOR PEOPLE UP TO 4 HUNDRED OR 450,000 IS THERE A CASE IN LETTING THE WHOLE THING GO AWAY IN 2025 AND RETURNING TO THE TAX CODE UN >> PRESIDENT BIDEN AND VICE PRESIDENT HARRIS ARE REALLY CONCERNED ABOUT THE ABILITY OF MIDDLE CLASS FAMILIES TO MAKE ENDS MEET AND REALLY FACE A VARIETY OF STRESSES DUE TO THE HIGH COST OF LIVING, PARTICULARLY IN AREAS LIKE CHILD CARE, HEALTH CARE, HOUSING, AND THEY BELIEVE IT IS THE RIGHT THING TO LET -- ALLOW MIDDLE INCOME FAMILIES NO THE TO SEE THEIR TAXES INCREASE.

NOW, THE COST OF THAT IS ONLY A FRACTION OF WHAT IT WOULD BE TO EXTEND ALL OF THOSE TAX CUTS BECAUSE THEY MAINLY BENEFITED VERY HIGH INCOME PEOPLE AND WEALTHY PEOPLE AND CORPORATIONS.

AND THEY HAVE EXPRESSED OPPOSITION TO ALLOWING THAT TO HAPPEN.

ON TOP OF THAT, YOU KNOW, THERE ARE WAYS TO -- TO PAY FOR BOTH INVESTMENTS THAT MAKE OUR ECONOMY FUNCTION BETTER AND MORE PRODUCTIVE AND ADDRESS HIGH COST OF LIVING THAT IS OF SUCH CONCERN TO AMERICANS.

>> AND YOU BELIEVE THAT THERE -- LOOKING AT COSTS OF INVESTMENT AGENDA WHAT ADMINISTRATION WANTS TO DO AND CARE ECONOMY AND AS WELL AS COST OF AGING SOCIETY THAT ALL THAT COULD BE FUNDED PRIMARILY BY RAISING TAXES ON PEOPLE AT VERY TOP OPPOSED TO CLAWING BACK SOME CUTS REPUBLICANS HAVE MADE UNDER BUSH AND UNDER TRUMP AMONG PEOPLE WHO ARE KIND OF UPPER MIDDLE WHEN TALKING ABOUT 400,000.

IS IT REALLY PLAUSIBLE TO DO ALL THINGS THAT DEMOCRATS WANT TO DO IN THE LONG RUN SOLELY BY RAISING TAXES ON THE VERY TOP 5% OR SO.

>> I BELIEVE THAT IT ACTUALLY IS >> OKAY.

>> AND WE HAVE PRESENTED A BUDGET FOR 2025 THAT DOES IT -- IT BRINGS BACK THE CHILD TAX CREDIT AND YEAR-END INCOME TAX CREDIT AND INVESTS IN OUR ECONOMY AND IN WAYS THAT WILL BOOST LONG-RUN PRODUCTIVITY AND IN ADDITION TO THAT, IT ACHIEVES 3 TRILLION DOLLARS OF DEFICIT REDUCTION.

IN PART, THE WEALTHIEST INDIVIDUALS AND MUCH OF THEIR INCOME COMES FROM CAPITAL GAINS WHICH UNTIL THEY REALIZED ARE NEVER TAXED AND OFTEN ESCAPE TAXATION ENTIRELY THROUGH STEP UP OF BASIS WHEN PEOPLE DIE.

IMPACT OF THAT IS THAT SOME WEALTHIEST AMERICANS AND HIGHEST INCOME AMERICANS ARE PAYING AVERAGE TAXES THAT ARE UNDER 10%.

SOMETHING LIKE 60% OF THOSE PEOPLE PAY 2% OR LESS.

>> YEAH.

>> THAT IS LESS THAN A SCHOOL TEACHER OR POLICEMAN PAY ON THEIR INCOME.

WE NEED A FAIRER TAX SYSTEM.

>> LET'S TURN TO ANOTHER ISSUE.

>> LET'S TURN TO ANOTHER ISSUE THAT OCCUPIED A LOT OF YOUR TIME CHINA SUMMER PRESIDENT CHINESE TECHNOLOGY COMPANIES LAST WEEK FINALIZED A SERIES OF TARIFFS ON CHINESE IMPORTS EVS SOLAR BATTERIES CRITICAL MINERAL AND STEEL ALUMINUM ARE YOU CONCERNED ABOUT DIRECTION OF ECONOMIC RELATIONSHIP BETWEEN TWO GIANT ECONOMIES WHEN PARTICULARLY THE US IS SO DEPENDENT AT THE -- SO INTERTWINED WITH CHINA IN ITS MODERN ECONOMY?

>> WE HAVE AN EXTENSIVE TRADE AND INVESTMENT RELATIONSHIP WITH CHINA AND I BELIEVE THAT MOST OF IT IS BENEFICIAL TO THE UNITED STATES AND TO CHINA AND UNCONTROE VER SHAL AND DOESN'T RAISE NATIONAL SECURITY ISSUES AND DOESN'T RAISE PROFOUND ISSUES OF UNFAIR TRADE.

IT IS IMPORTANT TO DEVELOP A RELATIONSHIP WITH CHINA THAT, THAT KIND OF TRADE AND INVESTMENT CAN CONTINUE TO THRIVE.

WE ON BOTH SIDES RECOGNIZE THE BENEFITS OF IT.

THAT SAID, WE DO HAVE CONCERNS.

WE HAVE NATIONAL SECURITY CONCER THE UNITED STATES IS NOT GOING TO COMPROMISE WHEN IT COMES TO THREATS TO NATIONAL SECURITY IMPACT.

WE DO HAVE EXPORT CONTROL AND WE HAVE CONTROLLED EXPORTS OF GOODS WE THINK AND BOOST CHINA'S MILITARY IN WAYS THAT WILL BE DAMAGING TO US NATIONAL AND IN ADDITION TO THAT, WE HAVE EXTREME SUPPLY CHAIN DEPENDENCE AND OVERDEPENDENCE IN MANY AREAS IN CHINA AND IN SOME CASES ARE AREAS THAT CHINA HAS HEAVILY ENGAGED IN BUILDING CAPACITY THROUGH ENORMOUS SUBSIDIES TO THEIR INDUSTRY AND ARE AREAS THAT WE DO HAVE CONCERNS AND WE FEEL TRADE SHOULD BE ON A LEVEL PLAYING FIELD.

WE WANT TO MAKE SURE THAT WE HAVE RESILIENT AND DIVERSE SUPPLY CHAINS.

TARIFFS THAT YOU MENTIONED THAT WE PUT ON ELECTRIC VEHICLES AND ON BATTERY COMPONENTS AND ALUMINUM AND STEEL, THESE ARE AREAS THAT CHINA HAS ENORMOUS EXCESS CAPACITY AND WE HAVE MADE A CONSCIOUS DECISION THAT IN THE AREA OF CLEAN ENERGY, WE WANT TO DEVELOP IT AS AN INDUSTRY IN THE UNITED STATES THAT IS NOT TO SAY WE WANT TO DO EVERYTHING ENTIRELY OURSELVES AND WE BELIEVE IN FRIEND SHARING AND HAVE BUILT IN DEEP IN TIES WITH MANY COUNTRIES THAT IN LATIN AMERICA AND ASIA THAT COULD BE PART OF THE SUPPLY CHAINS.

WE WANT TO REALLY REDUCE DEPENDENCE ON CHINA AND TARIFFS YOU MENTIONED WE PUT ON THOSE GOODS, YOU ARE TALKING ABOUT 18 BILLION DOLLARS WORTH OF IMPORTS, AT THE MOMENT.

THIS IS -- THESE ARE VERY TARGET IT -- INTERVENTIONS IF IN AREAS WHERE WE FEEL WE HAVE LEGITIMATE CONCERN.

>> IT IS NOT JUST SUPPLY CHAIN; YOU POINT OUT ADMINISTRATION HAS PUT ENORMOUS EFFORT TO ACCELERATING DEVELOPMENT OF CLEAN ERNL EARTH JI INDUSTRIES IN US AND TREASURY INVOLVED IN TRACKING AND CONSTRUCTION SPENDING IT HAS GOI >> YES.

>> ARE YOU CONCERNED WITHOUT THESE TARIFFS CHINESE IMPORTS WOULD OVERWHELM NASCENT INDUSTRIES IN THE US AND IS THIS ABOUT PROTECTING CLEAN EARTH EARTHY?

>> THAT IS IMPORTANT AND IN MOMENT WHERE SOLAR PANELS AND WIND TURBINES AND ELECTRIC VEHICLES AND ELECTRIC BATTERIES, CHINA -- CHINA'S PRICES AND COSTS ARE EXTREMELY LOW AND ALL THESE ARE AREAS THAT CHINA HAS ENGAGED IN ENORMOUS INVESTMENT IN OVER THE LAST DECADE AND IN MANY CASES THERE IS JUST UTTER OVERCAPACITY IN CHINA.

SO CHINA'S PRODUCTION OF SOLAR PANELS EXCEEDS TOTAL GLOBAL DEMAND AND CHINESE GOVERNMENT AT ALL LEVELS HAS BEEN THROWING MONEY TO DEVELOP THESE INDUSTRIES AND WOULD SAY, YES.

WITHOUT SOME PROTECTION, OUR INDUSTRY WON'T GET OFF THE GROUND.

>> YEAH.

>> AND THIS IS A CONSCIOUS DECISION THAT WHILE WE ARE CERTAINLY WILLING TO ENGAGE IN TRADE AND IN CLEAN ENERGY WITH FRIENDS THAT WE -- WE DO WANT TO HAVE SOME PRESENCE IN THE UNITED STATES.

IN THESE INDUSTRIES OF THE FUTURE THAT ARE IMPORTANT IN SUPPLYING JOBS TO -- GOOD JOBS AND ESPECIALLY TO PEOPLE WHO DON'T HAVE A COLLEGE EDUCATI >> YEAH.

I WILL ASK YOU ONE MORE QUESTION ABOUT THIS.

GOES BACK INTO THE PAST.

YOU SERVED IN BILL CLINTON ADMINISTRATION AND CHAIR COUNCIL OF ECONOMIC ADVISORS AND PERSON WITH TRIPLE CROWN OF CEA, FED, AND TREASURY SECRETARY, QUITE AN ACCOMPLISHMENT.

IF IN CLINTON ERA THERE WAS AND CERTAINLY HE BELIEVED THAT INTEGRATING CHINA INTO GLOBAL ECONOMY WAS A WAY NOT ONLY PROVIDING ECONOMIC OPPORTUNITY AROUND FOR THE DEVELOPED WORLD AND ALSO MODERATING ITS BEHAVIOR.

THERE WAS A VALUE IN BUILDING ECONOMIC TIES AND LOWERING TRADE BARRIERS AROUND T I WOULD SAY IF THERE IS ONE AREA OF CONVERGENCE BETWEEN KAMALA HARRIS AND TIM WALZ AND J VANCE AND DONALD TRUMP AND JOE BIDEN IN MANY WAYS IT IS THE REJECTION OF THAT VIEW AND HAS THE PENDULUM SWUNG TOO FAR IN THE OTHER DIRECTION IN YOUR VIEW?

ARE WE MISSING AN OPPORTUNITY AS COUNTRIES AROUND THE WORLD BECOME MORE FOCUSED NURTURING DOMESTIC INDUSTRIES AND BUILDING BARRIERS TO ECONOMIC INTEGRATION.

>> WHAT WE SAW, FIRST OF ALL, I THINK SOME HOPES AND ASPIRATIONS WE HAD FOR THE DEVELOPMENT OF CHINA GROWING DEMOCRACY HOPEFULLY IN CHINA AND ALONG WITH ECONOMIC DEVELOPMENT.

WE HAVE BEEN DISAPPOINTED THAT, THAT HAS NOT COME TO PASS.

I THINK THAT THE IMPACT OF CHINA AND BURGEONING TRADE WITH CHINA IN AFTERMATH OF CHINA JOINING THE WTO.

IT REALLY IMPOSED ALONG WITH OTHER -- OTHER FACTORS HARM ON ESPECIALLY WORKERS IN AMERICA WHO LACK COLLEGE EDUCATION AND EXPERIENCE SOMETHING REFERRED TO AS CHINA SHOCK AND SAW SEVERAL MILLION MANUFACTURING JOBS IN PARTS OF THE COUNTRY THAT TRULY NEEDED THESE JOBS.

THEY DISAPPEARED.

YOU KNOW, TRADE IS GOOD.

IT CAN ENHANCE OVERALL WELFARE OF A COUNTRY.

IF GAINS ARE NOT SUFFICIENTLY WIDESPREAD, IT IS SOMETHING THAT IS NOT SUSTAINABLE OVER THE LONGER RUN.

I THINK WE SAW THAT THERE MAY HAVE BEEN GAINS AND WERE A SIGNIFICANT GROUP OF AMERICANS THAT WERE LOSERS.

THIS IS NOT TO SAY THAT WE SHOULD SHUT DOWN TRADE AND INVESTMENT WITH CHINA.

WE GAIN FROM MUCH OF IT.

BUT I THINK THAT THE ATTITUDE ABOUT WHAT IMPACT DOES IT HAVE ON THE UNITED STATES HAS BECOME MORE REALISTIC OVER TIME.

>> SHIFT IN TEMPERATURE TOWARDS CHINA, DO YOU SEE IT REVERSING ANYTIME SOON OR NOW THAT NEW POLICY CONSENSUS IN THE US THAT WILL GO TO ENDURE >> THERE DOES SEEM TO BE BIPARTISAN AGREEMENT.

AND MY -- MY CONCERN, I UNDERSTAND THE RATIONALE FOR IT.

AND I AGREE WITH IT.

BUT I DO THINK THAT MUCH OF -- WE -- WE HAVE A DEEP TRADE IN INVESTMENT RELATIONSHIP WITH CHINA AND MUCH OF IT IS BENEFICIAL TO AMERICA AND IT SUPPORTS OUR EXPORT INDUSTRIES AND WE GAIN NEW TECHNOLOGY FROM IT.

IT -- IT'S -- IT IS A BENEFIT TO AND I WOULD NOT WANT TO SEE THIS BACKLASH PROCEED TO THE POINT WHERE WE REALLY INTERFERE WITH THOSE BENEFITS.

>> SECRETARY YELLEN, WE HAVE TO LEAVE IT THERE BUT THANKS SO MUCH FOR JOINING.

>> THANK YOU SO MUCH.