WE WANT TO GET RIGHT TO MICHAEL

MISSST PILLSBURY FOR WHAT IS

GOING ON WITH CHINA.

HE IS ONE OF THE WORLD'S LEADING

EXPERTS ON CHINA.

IS THIS TOUGH LINE THE PRESIDENT

IS TAKING, IS THAT THE WAY TO

GO, SIR?

>> YES, IT IS.

THE PRESIDENT IS REACTING TO TWO

DIFFERENT THINGS, LIZ.

ONE IS THE RENEGING, HE USED THE

WORD IN HIS TWEET, RENEGOTIATE

BY CHINA.

THIS IS BAD FAITH IN NEGOTIATION

TO GIVE UP SOMETHING, AGREE TO

IT AND COME BACK AND REVISIT THE

WHOLE THING.

THAT'S ONE THING HE MADE CLEAR

IN HIS TWEET ON SUNDAY.

THERE'S A SECOND PART OF IT,

WHICH I ADDRESSED THIS MORNING

IN A LONG ARTICLE ABOUT WHY THE

TARIFFS ARE A GOOD THING FOR A

TEMPORARY PERIOD.

THERE'S A FEAR THAT CHINA IS

GOING TO CHEAT ON THE TRADE

AGREEMENT, THAT THEY HAVE NO

REAL INCENTIVES NOT TO CHEAT, TO

GO STRAIGHT, IF YOU WILL.

SO TARIFFS GIVE THE OPPORTUNITY

TO CHINA TO EARN THEIR WAY OUT

OF THE TARIFFS BY COMPLYING WITH

COMMITMENTS THEY'VE MADE.

THIS IS AN UNUSUAL NEW IDEA

PRESIDENT TRUMP IS USING.

IT'S NOT THE OLD KIND OF TARIFFS

THAT ALEXANDERS HAMILTON

PROPOSED TO PROTECT THE AMERICAN

INDUSTRY, HAVE TARIFFS FOR 100

YEARS.

IT'S NOT A TARIFF THAT'S

DESIGNED TO PROTECT STEEL OR

ALUMINUM.

CHINA CAN EARN ITS WAY OUT OF

TARIFFS FAIRLY QUICKLY.

THIS IS A WAY TO GET CHINA'S

ATTENTION.

AND I WAS VERY PLEASED THAT

THEY'RE COMING, THE TALKS WILL

BE HELD ON THURSDAY AND FRIDAY.

THE MARKET, YOU KNOW -- THE IDEA

OF BUYING ON A DIP COULD PAY

OFFHAND SOMELY IF THE

OFFHANDSOOMELY IF THE

OFFHANDSOMEELY IF THE

OFFHANDSOMELYY IF THE

OFFHANDSOMELY AIF THE

OFFHANDSOMELY AND THEN THE MARKE

OFFHANDSOMELY AND THEN THE MARKT

COMPENSATES AND JUMPS UP 500

POINTS OR MORE.

LIZ: HAS CHINA BEEN -- I THINK

YOU POINTED OUT.

HAS CHINA BEEN BUSY IN THESE

LAST THREE WEEKS TRYING TO

WEAKEN THE DEAL?

>> THOSE WHO SAY THAT I THINK

ARE REFERRING CORRECTLY TO

CHINESE ACTIVITIES THAT HAVE

STARTED BACK IN EARLY MARCH

ACTUALLY, MORE THAN TWO MONTHS

AGO.

TO NOT HAVE THE CONCESSIONS THEY

MADE BE FINAL AND NOT HAVE THEM

VERY WELL KNOWN.

THESE TALKS ARE SECRET AS YOU

KNOW.

150-PAGE TEXT.

NOT ONE WORD HAS LEAKED.

ON THE CHINESE SIDE IT'S

POSSIBLE THAT THE HAWKS DIDN'T

REALLY UNDERSTAND THE DEGREE OF

CONCESSIONS THAT HAD BEEN MADE.

AND SO THEY GOT A HOLD OF THE

WHOLE 150 PAGES INSTEAD OF A

SUMMARY AND THEY BEGAN TO

REALIZE THAT THESE ARE SERIOUS

CONCESSIONS PRESIDENT TRUMP HAS

GOT OUT OF CHINA.

SO MAYBE THEY GOT A CHANCE TO

TAKE THEM BACK RECENTLY.

NOW THEY'VE SEEN THAT THE

PUNISHMENT PRESIDENT TRUMP IS

GIVING THEM MEANS DON'T DO THIS

AGAIN.

IF YOU MAKE A CONCESSION, STICK

BY IT.

THE AMERICAN SIDE MADE

CONCESSIONS TOO.

ONE CAN BE OPTIMISTIC ABOUT THE

TALKS BUT BOTH SIDES ARE

PRACTICED, TOUGH NEGOTIATORS.

I THINK PRESIDENT TRUMP IS

BETTER.

BUT THE CHINESE ARE NO SLACKERS

WHEN IT COMES TO TOUGH

NEGOTIATING TACTICS.

LIZ: WILL CHINA GIVE UP THE

HACKING AND ESPIONAGE.

I THINK YOU POINTED OUT THAT

ECONOMIC CRIME REALLY DOES PAY

WELL.

>> THEY ARE ONLY GOING TOIVE GET

UP IF THERE ARE STRONG

INCENTIVES LIKE TARIFFS TO BE

TAKEN OFF.

THE CHINESE BUILT A MODEL I'VE

WRITTEN A BOOK ABOUT THAT'S

UNIQUE IN THE WORLD.

THEY'RE STILL A STATE-CONTROLLED

ECONOMY.

MANY PEOPLE THINK THEY HAVE

GROWN SO MUCH IN HO YEARS, THEY

MUST HAVE A FREE MARKET.

THAT'S SIMPLY NOT CORRECT.

THEY NEED THESE PRACTICES, THE

THEFT, THE ESPIONAGE, SUBSIDIES,

THEY NEED IT FOR THEY MODEL.

SOME REFORMERS WANT TO CHANGE

THAT AND THAT'S WHAT PRESIDENT

TRUMP IS WORKING ON.

THAT'S WHERE LIGHTHIZER MADE IT

CLEAR IN ITS TESTIMONY.

LIZ: SHOULD WE NAME THEME

LIZ: SHOULD WE NAME THEM A

MANIPULATOR?

WILL THAT GET IT DONE?

>> IT'S CONTROVERSIAL IN OUR

SYSTEM.

YOU NAME A COUNTRY A MANIPULATOR

OF SURGEON WE CERTAIN

STIPULATIONS CAN BE PUT ON THEM.

SOME PEOPLE DON'T WANT TO GO ALL

THE WAY AND CALL THEM THE MA LIP

MANIPULATOR.

THERE'S AN ISSUE THEY CAN EARN

THEIR WAY OUT OF THAT TOO.

WE NAME THEM A MANIPULATOR, THEY

STOP AND WE TAKE IT AWAY.

THIS IS THE DYNAMIC THAT

PRESIDENT TRUMP IS TRYING TO

PURSUE TO GET AT CHINA.

HE WROTE A BOOK AND USED A