Let's focus now on those concerns around China's trade relationship with the U.S. and what these responses could mean.

Derek Scissors watches all of this closely as a senior fellow for the American Enterprise Institute.

That's a conservative think tank. And he joins me now.

Derek, welcome and thanks for joining us.

Help us understand a little bit about the relationship between these two economies,

the U.S. and China, the world's two largest economies. How interdependent? How intertwined,

rather, are they on each other? Well, on a matter of a daily basis, they're pretty intertwined.

The U.S. is the biggest consumer market in the world. China's the biggest producer in the world. They're the biggest exporter. We're the biggest importer.

And so if you just look day to day, it looks like they're really intertwined.

Now, you can make a pretty good argument that Chinese goods can be substituted for.

Not quickly, not immediately the way the President thinks, but I think over time the U.S.

and China could be considerably less intertwined than they are today.

And do you see that as one of the goals of this administration with these tariffs to try

to decouple the two economies?

I don't think so.

There's certainly people in the administration who have that goal.

For disclosure, I have that goal, at least partial decoupling. That's never been the president's goal.

He presided, he wanted to make a big trade deal in the first term and export more to China.

Now he's talking about, I want to talk to China. I want to make a deal. None of that sounds like decoupling. De coupling would be, hey, here's some tariffs, maybe not 145%, but 54% or whatever, and we're not negotiating. So it sounds to me like he wants to make a deal just like he did in his first term. So as you mentioned, China, of course,

is the primary global producer of a lot of things Americans consume toys, to cell phones, to

computers. Walk me through this now.

If tariffs do drive the prices up, imports, consumption of those goods here in the U.S. goes down.

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