Impact of president trumps tariffs on imports and other chinese items. How big and impact is this hurting companies and compare it to the benefits of the tax cut in 2017, which reduced rates on business. Are these tariffs offsetting the benefits of the tax cut . Neil there are two impacts, the first is the tariffs in place and already at cost, the second is uncertainty of additional tariffs. That is playing out over the next several months with respect to china and even automobiles, with the respect tariffs on automobiles. And if you are running a company, by the way, not just Large Companies, if you run a company you have difficult planning because you dont know the cost of goods to sell to consumers in the United States or the cost of something you are making in the United States. And it is not just there tariffs on our imports, it is tariffs posted in retaliation for the egg industry and increasingly manufacturers. Janet the university of Michigan Confidence numbers just came out. We saw a real confirmation that consumers are starting to get nervous, and a lot are spontaneously bringing up the trade war. How do Companies Think about that when they look at this environment where consumers are still spending pretty robustly, but that should be showing but that could be showing some cracks. Neil there are two different stories when we think about the economy. On the consumer side, a lot of strength, record, generational low unemployment, wages rising people wantflation, to spend money, they have more, you go to the business sided you start the a downturn in Business Investment for the first time in three years, manufacturing slipping into a recession, and not just Large Companies. One of the progressions we saw and have seen for the last nine months is fortune 500, Large Companies concerned about the tariffs. We are now seeing midsize companies, those with 600, 700 employees, 1000 employees, we are saying it is affecting their business and ability to plan. The next phase of that is, it slips into Small Businesses and consumers. We are especially worried over the next few months is that weakness and uncertainly weakness and uncertainty on the business side, large businesses, medium, Small Businesses and consumers, that is a recipe for an session for a recession. At the chamber we think the next months are critical. If policymakers make the right decisions, we can keep the economy growing, the wrong ones and they risk pushing us into recession. Chris lets talk about decisions that might be made. The federal reserve, the president has been tweeting about their decisions. There is a meeting next week in which i guess a rate cut is expected. Do your members feel Interest Rates are their biggest problem . How does this play out . Are there other decisions that could be made to support the economy . Policy is important. I dont want to understate that. The fed is making good decisions about how they support their economy. When we talk to our businesses, it doesnt matter the size, the geographic location, they tell us it is not the cost of borrowing, not the cost of capital, not the interest rate, what is driving concern is uncertainty in the policymaking process, especially with respect andariffs, the trade war, just this general uncertainty about how washington will operate and what the rules of the road are going to be that is causing them to pull back on investment. Rules of the road for what . Trade, butinly for also the regulatory environment. We have benefited the past three years from a big push in deregulation, but everyone is watching what is going on in the president ial debate and in the next year, and there is a lot of uncertainty about where major aspects of the economy go, very different views between candidates and political parties. If you are in the healthcare space, you are watching and you are wondering what the system is going to look like in two years. If you are in the energy space, similarly you are watching regulatory actions by the administration, but also a lot of litigation, and a lot of litigation that is not going to play itself out until likely past the 2020 election. So you have to make some educated guesses and some assumptions about what the rules of the road are, and when there is this much uncertainty in the political environment, you tend to be more cautious. And that is bad for the economy. Janet in terms of domestic policy, we are seeing a Global Growth slowed down. If that were to spill into america and we would see a recession, how prepared are companies to do with that . Neil we are seeing Global Growth and that is another headwind. We should also mention a lot of things outside our control that our headwinds for american companies, whether that is the situation in hong kong or brexit and the e. U. U. K. Relationship. The u. K. Is an important part in an important partner, as is the eu for Many Companies in terms of operations, sales, global footprint. A lot of uncertainty being generated there. As far as preparedness for a recession, that is a reason you are seeing a decline in Business Investment, as you prepare for uncertainty, one thing you do is you pull back on investment. This is also why we are at this point over the next several months. If you are generally preparing for what you believe could be a downturn, you will pull back from fixed investments, longterm first. You continue to support employees, hiring and wages in a tight labor market. We should talk about how tight the labor market is at some point. And then you reach a point where you begin to pull back on your employees, and that is how you begin to tip the economy into a recession, and that is what we have to worry about. Will never have to ask me twice to ask a labor question. Im curious what you are hearing about the labor market, and how companies are dealing with the scarcity of especially skilled workers. To see rising wages for american workers, we like to see that, but number two, they are actually turning down jobs. We do surveys that were recently looking at the constructors the construction secretary the construction sector, and half of the industry selfreports they are turning down business because they dont have the skilled workers to complete the work people are asking them to do. Labor department numbers came out this week on job openings, and we compared it to the broadest pops possible outlook of employees that is available, everybody unemployed and looking for work in the last month, but also any time to look for work in the past 12 months, the broadest way you can look at the available workforce, and it is one 21, one job opening for every available worker, and that assumes they all have the right skills and are the right match are in the right geographic location, which we know they are not. So there is a real crimp on the economy. It is also a record low in terms of that one to one we are facing. Look at the average over the last two decades, it is usually three to one, so it is a three times tighter labor market right now for america. Note, how might businesses have more workers to choose from . One avenue might be immigration. And you tell us where the chamber sees that issue, and what steps you might take to affect the debate . Neil we absolutely need more workers. We need more high skilled and frankly low skilled workers coming in through the immigration system. We are moving the wrong way on emigration. We are limiting the supply of people coming into this country legally. That is important. We are not talking about illegal immigration into this country, we are talking about the legal workforce that we need to do more to expand legal immigration. Its a tough political issue. I suspect we are not going to mitch mott make much progress until we get past the next election. 121, aoned the broadest, lot of those people need skill strength. Businesses are stepping up and providing it but they need partners, partners at the state level, the local level, who are helping them train individuals for the jobs they have. Janet i wanted to follow up on your wages point. One thing that is interesting is that as you mentioned, by a lot of measures the job market looks very tight, but at the same time wages have increased gradually, they havent shot higher. Based on your on the ground view of this, from what you are hearing from members, what is holding wages from rocketing higher, as they have in previous cycles . Neil they are rising but you are right, not as fast as in previous cycles. One things total compensation, business doesnt just look at what is deposited in each of our bank accounts. They look at the total cost of employment. The total cost of employment, including health care for example, is rising much more rapidly. So that is eating into a little bit of the wage support. We will probably continue to see greater wage growth if we can keep the economy growing, then what we have seen. It is just a slower acceleration than we have seen, when other benefit packages were more restrained in the past. Broader step a back, this week there was a report from the Census Bureau about Household Income and poverty. While it had good news about reduction in poverty and 2018 from the previous year, it also showed that basically, Household Income is about the same as it was 20 years ago, in 1999, even though the economy has enlarged, has grown 50 since then. On the wages issue, is everyone benefiting from this economy . Is there more we can do to potentially spread these benefits more widely . Neil it is an issue for the chamber, it is something we are concerned about. One of the factors affecting both Household Income and wage growth is the overall acceleration of the economy. We have had a recordlong extension. Also, historically weak growth by u. S. Standards. So there is a little math that works here that the faster the overall economy is growing, not the duration of the expansion, but the size of the expansion, will propel wages higher and Household Income higher. There are also other aspects going on in terms of household makeup, demographic changes, america getting older, our workingage population getting smaller, it is affecting some of those things, but at its core, things probably makers are trying to affect and things are were trying to affect at the chamber, it is getting bit us it is getting us back to 3 growth, the recipe for unlocking rapid wage growth and higher Household Income. That has beenng interesting in the last couple of months is that once we g of , it confirmed that despite tax cuts and some policies folks have been pushing for for a long time, you didnt see that supplyside step up, sustainable change in the growth last year and into this year. Im curious, do you think that is because the policy package suppliesquate, whether and benefits were over promised or whether it is the trade war offsetting the effect . And takes. Ve puts we got benefits from tax reform, which generally take a longer time to materialize than a lot of people like to acknowledge. We were cautious at the chamber not to promise immediate benefits. This is about longterm growth trajectory, not a shortterm sugar high. You also have shortterm costs. Looking at the overall structure are in aonomy, we place where you have got to get a lot of the policy right, and you have to get all the pieces working in the right direction. It is important to get fat to get tax reform done, to do regulatory relief, but if you dont have labor policy right and you dont have digital regulation right, if you are not focused on the right immigration policies, intellectual policy protection intellectual property protection, if you dont get those pieces and place you are not going to get the robust growth we have seen in the past. This isnt a situation where you can say, we did that one thing right, shouldnt everything be better . No. We need our elected officials to get almost everything right to get to that point. Is there one policy area or industry that could tip us back into a recession . Is a i dont think there particular industry that would do that. It is the overall sentiment and it is the fear that it moves from lack of confidence on the business side to the consumer side. Consumer spending makes up 70 of our economy. Warning signs we are starting to seize that they are becoming more uncertain about the future. If they become more uncertain at the same time business becomes more uncertain, that is where the real danger lies. There are certainly certain sectors we are watching, manufacturing, which the most recent numbers as you probably know took us into recessionary territory for that industry, talk to anyone in the ag community what is going on there, four years of down prices and people in the ag world are really struggling. So we have individual sectors that are hard but what would really push the American Economy is the consumer. Greta so you dont see a bubble anywhere . Neil i dont see a bubble. Janet so the opposite of gretas question, are there any policies you can see would take away the Recession Risk . Itif i could use one word, is about certainty. There are lots of Different Things washington could do to restore certainty. On the trade space, it is not they have to it is not that they have to resolve every trade dispute we are in, it is about halting the escalation in the tit for tat we are currently on. Removing the threat of continual escalation will probably provide a huge reassurance of the rules of the road for business. Mexicocanada trade agreement, which is our numberone legislative priority at the chamber, congress and acting that without a lot of drama would provide reassurance that our trading relationship with our two biggest trading partners, canada and mexico, will continue to go smooth. If they can get an infrastructure bill done. Its one of those things democrats and republicans both say they want to do. Because of the manufacturing downturn, we are seeing bluecollar workers not seeing the Job Opportunities they want. Doing something on infrastructure and making a big investment we think would provide a shot in the arm to the economy. Greta we heard the speaker of the house say this past week on usmca, democrats are waiting for enforcement language. What is she referring to . The speaker and a group of her colleagues in the house have been negotiating with ambassador lighthizer and the ustr about particular aspects of usmca, the most particular of which is enforcement. This week they were trading proposals between Congressional Democrats democrats and the administration. We think they are making progress. They are not there yet, but i suspect they will have a deal in the coming weeks, one we will be able to support, one that will deserve the support of every member of congress. One of our messages to republican and democrats, given the importance of usmca, its very difficult to say you are a progrowth, probusiness member of congress if you are not willing to get usmca passed. You have sounds like differences with the administration on trade and immigration and lack of movement on the infrastructure bill. Chamberow in 2016 the actively supported Many Republican members of the senate. Would you like to see more independence from folks on the republican side in congress, or movement by them to change the dynamic on trade, immigration and others . Neil the overall thing we would like to see from both parties is a resurgence in the kind of governing center, folks interested in getting things done. Rarely in this town do you get 100 of your way. That never happens. If you are waiting around to get 100 of what you want, you are going to be waiting a long time. That means pressing problems dont get solved. We used to have a center within both parties that were interested in never letting the perfect be the enemy of the good and finding compromise. That has vanished a little over the last few years, so we are supporting candidates for congress, republicans and democrats, who are committed to that kind of responsible governing. Greta has that changed in recent years, your political thinking toward the two parties . Always beene committed to probusiness candidates and elected officials regardless of party. What has happened over the last several years, the polarization, everything moving to extremes, and the center that used to exist in both parties as frankly been hollowed out. And it is a change for us to talk about it as restoring the center. Earlier this year, the chamber for the first time in 40 years changed how we judge members of congress on their performance. It used to be simply, how did you vote on certain bills . Now, we give members credit whether they reach across the aisle. If you are a republican, you get credit for working with republicans. Are a democrat, you get credit for working with republicans. One thing that came up last month was that a Business Group in washington, the business round people the Business Roundtable, changed the policy where they said businesses should focus solely on shareholder value. They decided to take a broader view and say businesses should also care about worker tray worker pay, training, environmental issues. Can we expect a similar move by the chamber perhaps . Neil we have always said that businesses who expect to make a profit, to be around for a while, our members tend to be around for a while, are businesses who take care of employees, customers, and the communities in which they operate. It is not terribly new to suggest businesses are interested in the welfare of their workers are the customers or their communities. Isrt businesses, business focused on delivering value for their shareholders, are doing all those things. And they have been doing those things for quite a while. Chris a lot of commentary around the Business Roundtables move is that they were responding to greater skepticism , particularly among young people. Do you see that sentiment . Neil there is some sentiment about that out there. Even though we have had recordlong growth, it is fairly anemic, we talked about wages not growing as fast. Its not perfect. A lot of folks are struggling to pay bills, and there are a lot of policies we need to fix for that to grow. That doesnt mean rethinking our entire economic system. That doesnt mean moving away from the free market. What Business Leaders and elected officials need to do is concentrate on solving some of these problems. What our colleagues at the be rt, and you see ceos every day on a host of issues saying, we center, findthat some compromise and demonstrate that as a nation we are capable of tackling some of these problems, getting things right so that we can grow and prosper. Janet pushing a little further with this idea, part of the Business Roundtable decision chris was talking about was this idea of a ranking of priorities, and fiduciary duty, this idea you have to take care of your shareholders, for a long time in the Business Community has come first and has been the primary goal. Saying it should not be the kneejerk, first priority. I would love to hear about whether that movement is happening among your members. This idea of ranking priorities, and that we are going to get to a point where you have to choose one or the both their is taking statement and the discussion going on, that is not exactly how most of our members and ceos think about this. These are all interconnected. If you are a ceo or are running a company, you are thinking about what you need to do to grow right now, grown a year, over the next five or 10 years. And all these things are interrelated. I need a workforce that is giving their best. I need to be operating with a Customer Base that wants to support the company on by what we are selling, and that is the way we maximize profits. I dont think you get into a situation where a ceo says, it is johnnys paycheck or an extra penny on the earnings. Thats not the way these things think. It is a compliments of it is a comprehensive approach to how you grow a business. Maybe i would concede the Business Community hasnt done a great job of talking about that in the past, and we are tying to do a better job of explaining all the factors that go into running a good company that supports its employees and communities, but that doesnt Mean Companies havent been operating that way. I think youade, mentioned some issues are out there a little under the radar, such as potential tariffs on european autos and autos from elsewhere. How concerned are you about those being imposed . The Economic Impact would be devastating. It is not just automobiles, it is also imports, and this is an important factor of the American Economy. It is not just manufacturing plants and auto repair shops, its the dealerships and everyone of our communities, all the jobs they support, a lot of ripple effects if you were to impose the tariffs the administration has under consideration. It also is just another matter of uncertainty. A few are in the automobile business or affected by the automobile business, it is one thing that is not running your companies, not taking care of your employees or supporting your communities, the are having to weigh. Anytime you are spending time as a Business Owner focused on that is time and energy you not spending figuring out how to grow your company you are not spending figuring out how to grow your company, and hire more workers. Neil bradley, thank you for being this weeks newsmaker. We are back with our reporters, gina from the new york janet from the New York Times and chris with the associated press. Tell our viewers the influence the chamber has in washington dc, and has it changed over the years . They have extraordinary influence. They are a voice for the Business Community. In the past that has been crucial because a lot of republicans and democrats want to position themselves as probusiness, companyfriendly candidates. We think some of that has weakened slightly in this populist area with a lot of polarization. The chamber sits at the middle of the political spectrum, just wanting certainty. And that has really shifted in washington. There is a real appeal to populist, grassroots voters now, and much less of pressure coming from these companies. Chris it is not something perhaps even republicans want to be associated with as much, im doing what the big Business Group is telling me, it is something they wont necessarily, and a lot of voters are tuned to special interests and the impact in washington. But they have a big, Granite Building right across the street from the white house so they certainly have a lot of sway. Thea we heard from beginning we heard from him at the beginning when you asked about the trade wars, and if it is dwindling the benefits of the tax cut. His answer was, it is definitely dampening the impact of the tax cuts. Why is that . And what could be the longterm impact . Janet chris you are seeing a lot of Big Companies talk about not just tariffs on china, but there have been tariffs on steel and aluminum for close to a year, and everybody from carmakers to Smaller Companies are talking about millions and in some cases billions of dollars they are spending on these tariffs. I think ford said they had spent over 1 billion and that was a while ago. So that cuts into profits and particularly to the degree some of them are trying to keep costs off their customers, although i think some have passed them on to the customer, but to the degree they are trying to offset that, that has cut into their profits and eliminated some of the benefit of the tax cut that the chamber was certainly a big fan of. Janet more importantly, those immediate cuts, these tariffs are stoking a lot of uncertainty for companies. And when companies are uncertain, they dont invest. And when in particular they are concerned about an upcoming recession being possible, they dont invest. And capital deepening is what Companies Call it and it has very serious longterm effects. It means down the road growth could not be as strong as it could. It is not just in the current moment that it is slowing growth. It means there are fewer machines to make labor productive down the road, so you would see slower gdp than would otherwise happen, for potentially years or even decades. Greta we heard neil bradley say, one way to lessen the uncertainty or avoid a recession is halt the escalation of this uncertainty. How is that happening in washington . Who is escalating the uncertainty . Chris the president is escalating it with tweets, making it clear that he will tweet out a threat of tariff increase without warning. As not always clear who among his staff is even ready for that. Businesses complain all the time about uncertainty and whether a new law is passed, but there is some resonance in this case. I was interviewing a manufacturer of child car seats and they were talking about, given how much regulation is around a product like that, if they were to shift supplies from china to another country, it would take a long time to get that in place, make sure it passes regulatory muster, and it could take a year or longer. And when you have that time framed in mine timeframe in mind, and equat timeframe in mind and a tweet changes policies, a lot of Companies Find it difficult to plan going forward. There is a lot of escalation from tweets and comments as well as up and down with tariffs that are proposed. Greta and then the potential for european auto tariffs. Janet he said it would be devastating, which i think is an interesting assessment of the potential impact of those tariffs. If those tariffs would take effect, they would go on and exactly the wrong moment in the business cycle. Because germany is already on the brink of slipping into recession. And if its auto sector found itself under any additional pressure, you can safely bet that they will in fact see a recession. The European Central bank does not have a lot of policy room to bail them out right now, so we are at this Inflection Point where it looks like policy moves like that could be decisive. Gina with the New York Times and chris with the associated press, thank you both for being part of newsmakers. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] the house will be in order. For 40 years cspan has provided america with unfiltered coverage of congress, the white house, the Supreme Court and Public Policy events from washington dc and around the country, so you can make up your own mind. Created by cable in 1979, cspan is brought to you by your local cable or satellite provider. Cspan, your unfiltered view of government. We would like to welcome a new face to the communicators, congressman jerry mcnerney, democrat from california, member of the energy and commerce committee, cochair of the Artificial Intelligence caucus. Congressman, welcome to the communicator