First it was his interview with the FT, in which Trump warned China that the US was ready to take North Korea unilaterally; this was followed by the far more dramatic interview in the WSJ where the president flipped on his strong dollar policy, and reversed his stance on interest rates, Janet Yellen and the the Ex-Im bank.
Today, Trump followed up with another interview this time with the AP. While the soundbites distributed by the press focus tend to focus more on Trump’s media habits – largely irrelevant for markets – the highlights below taken from the transcript (link) are far more relevant to policy and risk assets, especially the last bullet point, as it pertains to Steve Bannon.
- EUR, EGP. Trump speaks of their first visit. He didn’t expect to have “chemistry” with her given they are at odds over Nato and immigration, but they had “unbelievable chemistry.” Same can be said for Egyptian President el-Sissi and Chinese President Xi.
- Government shutdown takes precedence over healthcare reform. Not many details on the latter, while he doubles down that Democrats must accept his wall.
AP: Obviously, that’s going to come in a week where you’re going to be running up against the deadline for keeping the government open. If you get a bill on your desk that does not include funding for the wall, will you sign it?
TRUMP: I don’t know yet. People want the border wall. My base definitely wants the border wall, my base really wants it — you’ve been to many of the rallies. OK, the thing they want more than anything is the wall. My base, which is a big base; I think my base is 45 percent. You know, it’s funny. The Democrats, they have a big advantage in the electoral college. Big, big, big advantage. I’ve always said the popular vote would be a lot easier than the electoral college. The electoral college — but it’s a whole different campaign (unintelligible). The electoral college is very difficult for a Republican to win, and I will tell you, the people want to see it. They want to see the wall, they want to see security. Now, it just came out that they’re 73 percent down. … That’s a tremendous achievement. … Look at this, in 100 days, that down to the lowest in 17 years and it’s going lower. Now, people aren’t coming because they know they’re not going to get through, and there isn’t crime. You know the migration up to the border is horrible for women, you know that? (Unintelligible.) Now, much of that’s stopped because they can’t get through.
- He repeats positive language on China – he’s focused on North Korea partnership, not currency manipulation: ” But President Xi, from the time I took office, he has not, they have not been currency manipulators. Because there’s a certain respect because he knew I would do something or whatever. But more importantly than him not being a currency manipulator the bigger picture, bigger than even currency manipulation, if he’s helping us with North Korea, with nuclear and all of the things that go along with it, who would call, what am I going to do, say, “By the way, would you help us with North Korea? And also, you’re a currency manipulator.”
- He claims some estimates of the wall costs are too high. “Oh I’m seeing numbers — $24 billion, I think I’ll do it for $10 billion or less.”
AP: If you don’t have a funding stream, your message to your base is what?
TRUMP: My base understands the wall is going to get built, whether I have it funded here or if I get it funded shortly thereafter, that wall’s getting built, OK? One hundred percent. One hundred percent it’s getting built. And it’s also getting built for much less money — I hope you get this — than these people are estimating. The opponents are talking $25 billion for the wall. It’s not going to cost anywhere near that.
AP: You think $10 billion or less.
TRUMP: I think $10 billion or less. And if I do a super-duper, higher, better, better security, everything else, maybe it goes a little bit more. But it’s not going to be anywhere near (those) kind of numbers. And they’re using those numbers; they’re using the high numbers to make it sound impalatable (sic). And the fact it’s going to cost much less money, just like the airplane I told you about, which I hope you can write about.
- Previewing the NATO talks, he sticks to strong tone: “It’s not fair that we’re paying close to 4 percent and other countries that are more directly affected are paying 1 percent when they’re supposed to be paying 2 percent. And I’m very strong on it and I’m going to be very strong on it when I go there in a month.”
- He declined comment on Le Pen being the next president of France. Since this interview, his spokesperson has also come out to say that Trump is not endorsing Le Pen or any other French candidate.
- Termination is still on the cards for Nafta. “I am going to either renegotiate it or I am going to terminate.” He repeats there’s a 6m termination clause he can take use of.
- He doesn’t talk to Merkel or “other European leaders” about Iran but thinks Iran has “broken the spirit of the (nuclear) agreement.” Remember, last week, Secretary of State Tillerson sent off warning alarms about Iran.
- He refused comment on the Pentagon’s ISIS plan but does say that Americans serving in the military shouldn’t expect “much” of an increase in troops for the Middle East.
- When asked if he thinks he has “the right team in place for your next 100 days” and “Do you mean your White House team,” Trump most interestingly started with “Yeah, my White House team. I think Reince (Priebus) has been doing an excellent job.” Keep in mind there has been various chatter that Priebus could be out soon, along with that of his strategist Steve Bannon. Priebus was the only single name mentioned when discussing his “White House team.”
AP: … is do you think you have the right team in place for your next 100 days?
TRUMP: Yes. I think my team has been, well, I have different teams. I think my military team has been treated with great respect. As they should be. I think my other team hasn’t been treated with the respect that they should get. We have some very talented people, and very diverse people.
AP: Do you mean your White House team when you say that?
TRUMP: Yeah, my White House team. I think Reince (Priebus) has been doing an excellent job. I think that, you know, this is a very tough environment not caused necessarily by me. Although the election has, you know, look, the Democrats had a tremendous opportunity because the electoral college, as I said, is so skewed to them. You start off by losing in New York and California, no matter who it is. If, if Abe Lincoln came back to life, he would lose New York and he would lose California. It’s just the registration, there’s nothing you can do. So you’re losing the two biggest states, that’s where you start. OK. The Electoral College is so skewed in favor of a Democrat that it’s very, very hard. Look at Obama’s number in the Electoral College. His numbers on the win were … but the Electoral College numbers were massive. You lose New York, you lose Illinois. Illinois is impossible to win. And you look at, so now you lose New York, Illinois, no matter what you do, and California. Right. And you say, man. Now you have to win Florida, you have to win Ohio, you have to win North Carolina. You have to win all these states, and then I won Wisconsin and Michigan and all of these other places, but you remember there was no way to, there was no way to 270.
Source: AP Transcript, Citi