Secretary of State
Detroit Economic Club
June 18, 2018
SECRETARY POMPEO: Thank you. Thanks, Gerry, and thanks to the Detroit Economic Club for hosting me. It’s great to be with you. The whole Twitter thing up there makes me really nervous. (Laughter.) And to be – to have my name mentioned in the same sentence with folks like Rusk and Kissinger and Shultz, I find it odd and humbling and truly driving me every day to try to do my job in a way that honors our country in the same way that each of them did.
Before I came here – when the speech was originally set I was the CIA Director. That’s when I originally accepted the invitation. So my remarks were about espionage and economics. I’ll come back to that. But my role is a bit different today, a little more public. You’ll note I got the Michigan deal – I didn’t go blue or green, I wore red, the neutral here, as I understand it. The same issue with my family between Army and Navy, always wear the black and gold.
President Trump quintessentially understands that for us to achieve our foreign policy goals we need strength here at home, that thriving communities like here in Detroit are true force multipliers for us all across the globe. He knows that strength abroad is impossible without strength at home. And so I’m excited to talk to you about today what the State Department does, how we do our part to assist you all in wealth creation, how we help American businesses and families, and perhaps most importantly, why that matters, why that matters in the role that I have today.
Now, I know when you just heard me talk about how we’re going to help you – when someone from the government tells you they’re here to help, it raises an eyebrow or two. I get that. I was in the private sector, as Gerry mentioned, for most of my life – most of my adult life. I ran two small businesses. They were manufacturing companies. But before that I was the employee of the month at Baskin-Robbins twice. (Laughter.) My mother was really proud. No one else, but my mom thought that was pretty nifty.
The businesses we built depended on a strong America and global customer base. The first business we sold parts to, Boeing and Gulfstream and Lockheed and Cessna and Raytheon – all the airframe manufacturers – we grew it to over 100 million-dollar-a-year company virtually from scratch, and each of those companies were selling their product in turn all around the world.
Those people that worked with me there at Thayer Aerospace were real Americans. They often had a second job on a farm milking, working the land, besides the time they spent running a lathe or a mill. And I’d say the same thing about the oil field company that I ran. We sold mechanical parts, steel goods, to the down-the-hole drillers: pumps, swivel hooks, and the like.
I tell that story to you today, that part of my life to you because it is central to my understanding of how it is the State Department needs to enable a strong America and successful foreign policy. It’s not because I’m looking for a job. I’ve got all the work I can handle today, I assure you. But I want you to know that I consider the economic elements of what the State Department does a little less noticed but equally important with the other work.
Most of the time you hear about the State Department, it’ll be something we’ve done around the world – in North Korea or Iran or in Africa – but in fact, economic diplomacy has always been central, when done right, to the State Department’s mission.
What that means is we use American power, economic might, and influence as a tool of policy to help America achieve its interests and promote our values around the world. And if we do that right, it in turn cycles back to prosperity at home. We build relationships that create jobs and sustain American businesses and spur economic growth here at home. We do our best to call out unfair economic behavior as well and break down barriers to market entry so that our companies have fair and reciprocal opportunities to sell into markets all around the world.
It goes back a long ways. You mentioned three of the great names. Secretary of State Thomas Jefferson wrote in 1790 that it was central for him to protect American trade in the Mediterranean – and noted that it was suffering because North African pirates were attacking our commercial ships. A little different problem today, but the theft of our stuff remains a central challenge for America.
Today we have over 200 officers serving in our Economic Bureau and 1,500 economic officers serving in embassies all across the world. Each of those individuals has the job to make sure that we continue to have the most robust economy, the most dynamic economy, in the entire world. We hope we can help you in that way, too. As you travel the world, we welcome you coming to visit. We’ll share the insights that we have about operating there. We’ll help you with regulatory challenges in those places as well. It is indeed our task to help American companies have the opportunity to succeed around the world.
And we have partners at the Foreign Commercial Service from the Department of Commerce who also do this same work. I do hope that you will take advantage of this resource that you, American taxpayers, have provided.
We have a good example that’s here in the room with us today. Our embassy in Nicaragua, in tandem with the Department of Commerce, works with local partners, Flex Building Systems – I met a few of you in the back somewhere back there – a Michigan company that makes prefab housing products. We’re proud to work with Flex. They have provided fast and affordable housing solutions in the wake of a number of natural disasters and have helped build schools, clinics, and hospitals in remote parts of Central America and the Caribbean and Africa. I’m glad you all are here today. It’s a good example of the State Department working alongside entrepreneurs to successfully solve problems and create wealth here in America.
If we get this right, economic diplomacy also does strengthen our national security. President Trump’s strategy says that economic security is indeed national security. They are, as he has described it, synonymous. Making sure each of you has the opportunity to do what you do best is critical for – the stemming the – creating the prosperity that undergirds our security and freedoms.
Economic diplomacy too strengthens alliances around the world, as well. I saw this when I ran my two small businesses. The world knows that American economy is the largest and most influential and, frankly, the most innovative on the planet. It’s the envy of our allies and our adversaries. That economic might is one of the most important tools, it’s one of the biggest pieces of street cred, that I have as I travel the world. Without it I’d have much less leverage. It allows us to galvanize our allies towards shared goals and uphold our commitments to them.
And our team in the Trump administration is committed to economic diplomacy. I’ve talked to the President about it many times. The first mission – he reminds me always – is to create jobs and generate wealth here in the United States. But to do that we have to engage internationally. But before I talk about that, I do want to talk about the domestic record we’ve built now in some 17 months: nearly 3 million jobs, over 300,000 in manufacturing – something that was important to me and important to this great city, and over 300,000 new construction jobs as well; unemployment the lowest since April of 2000; and for every new regulation, we’ve gotten rid of 22. This helps cherry farmers and automakers here in Michigan, energy producers in places like Kansas, and frankly, every employer in between. And the tax cuts have left $3.2 trillion in the hands of you and not the government. Sixty-seven percent of Americans now believe that it’s a good time to find jobs. There are now more jobs available than job seekers seeking them. We need to continue to grow the jobs and continuing to create a workforce that can support them.
This economic upswing I have heard you all talk about here in Detroit itself. You refer to it as the renaissance, the renewal here in Detroit. You should be very proud of it. We think it’s taking place all across America, and we see data that supports that belief. We think this is important to businesses but most important to the men and women who you spoke about, who are today in flip-flops, who will soon be out looking for their summer job or their first job out of high school in a trade or with their college diploma seeking work somewhere here in America. We have an obligation in the State Department to create opportunities for them.
I went through the laundry list of the President’s accomplishments because what I do every day complements them. None of those were centrally State Department initiatives. But I know that. I know that if you all don’t have the opportunity to sell goods abroad and to purchase components from abroad as well, then that growth will diminish, and we just simply can’t let that happen. With $21 trillion in debt, there is an enormous amount of economic growth that we need to sustain our way of life.
But I have to tell you too I’ve seen this. I saw it – I see this in my current role, and I saw it in my previous role as the director the CIA as well. This dynamic nature of our economy teaches. It teaches others around the world. Our model is not the model that’s been adopted in many parts. Frankly, some of the most successful economies today haven’t adopted our model, but I am confident that they will. They will do so because capitalism and the dynamic nature of America is essential to economic success. And you can avoid that for a little while, but at the end of the day, the dynamism, the creativity, and the innovation that follow from that can only happen in a political environment that is like ours, with fairness and opportunity for every individual to become a success.
I want to talk about a handful of ways that the State Department is involved in this. First, we’re working to maintain American sovereignty on the world economic scene. If the U.S. Government does not participate in robust international economic engagement, we will lose out to places like China. But we can never lose our economic sovereignty in doing so. The experience of Brexit, which is ongoing, and of the European Union shows us that it is difficult to recover economic independence once it’s relinquished. It also shows that the economic policies that centralize power diminish the free market’s capacity for wealth creation and the success of both consumers and businesses alike.
Second, the State Department has a primary responsibility ensuring markets are open. Since we’ve taken office, we’ve had many successes in breaking down barriers, but there remains a great deal of work to do.
For example, South Korea has agreed to allow many more U.S. auto exports – long a priority for the Big Three here in Detroit – and it’s addressing other concerns about the U.S.-Korea trade arrangement as well. In Argentina we’ve gotten them to reopen their pork market to U.S. producers that was closed since 1992. Overall, we are convinced if it’s an American product, we want to gain access for it; and when we do have access, I am confident that Americans will outcompete our competitors nearly every time.
Third, we’re working hard to attract international investment here in the United States. Many of us, including my small business, depended on it. As part of our push with Saudi Arabia, we’re looking for them to put more money into America. During the President’s first trip, he got billions of dollars’ worth of new money coming from outside here into the United States. When that money comes, we get private sector investment from the United States along with it as well.
Fourth, we’ll capitalize on Americans’ abundant energy resources. It is an enormous comparative advantage. It’s common sense to take advantage of this and to bring the copious reserves that we now have not only identified but determined how to produce at an economic price that can compete just about anywhere in the world. We’ve done this in places like North Dakota and Ohio and Pennsylvania, and so many others. Indeed, increasing our exports is central to our security. If we can export to Europe, we put Russia on its back foot. If we can export to Asia, we can do the same with China.
We’ve watched energy diplomacy benefit companies like Cheniere that is exporting cubic – or excuse me, natural gas to over two dozen countries from its port in Louisiana, nearly 1,000 direct jobs and over 100,000 indirect jobs already created.
We’ve also provided technical assistance on the other end to countries who would much prefer to take American energy product than that from others for whom they may become dependent and would use that in a way that wasn’t in their country’s best interest.
Finally, we’re taking a really hard line on foreign practices that harm America. Whether that’s threatening our technology leadership through intellectual property theft or forced technology transfer, we are hard at ensuring that we protect American property. Everyone knows today that China is the main perpetrator. It’s at an unprecedented level of larceny. I was with President Xi on Thursday night. I reminded him that that’s not fair competition.
Chinese actors also continue to conduct cyber activity, so they’re not just taking it by forced technology transfer or stealing it by way of contract, but committing outright theft. We have an enormous responsibility, each of us, to work to stop it.
Chinese investment, too, around the world – it’s welcome, but we need to make sure that it doesn’t come with terms that advantage China in our market or our commercial. To the extent they engage in behavior that American businesses would never engage in, that is using investment to exert political influence and control over rival nations, American diplomacy has an obligation to do our best to respond to it.
You’ve seen that with some of President Trump’s decisions with respect to tariffs. For too long, America has allowed the free trade framework to become distorted to the advantages of countries other than the United States. Remember that our diplomacy puts American workers and American businesses first.
This isn’t just China. President Trump has clearly said that the asymmetric trade relationships with the G7 also need to be fundamentally reconsidered. They need to lower their trade barriers; they need to accept our vegetables, our beef, our fruits, our machine products. These are non-tariff barriers that ought not to exist if free and fair trade is to be achieved.
It’s a simple moral principle, this idea of fairness. As you saw at the G7, President Trump made very clear we are happy to have 0 percent tariffs on every product. We are happy to eliminate all subsidies. We’d be thrilled to see non-tariff barriers eliminated in their entirety. If every country does that, we will too, and I am confident that will grow America.
You’ve seen this same idea when it comes to our securing our nation as well. The President talks a lot about national security burden-sharing. We’ve seen it in North Korea too, and we’ve seen our allies respond. The effort that President Trump took last week in Singapore could not have happened without real economic diplomacy. President Trump rallied every nation in the world to pressure North Korea in a way that it would begin to rethink its own security and to come to view its nuclear weapon system not as a security blanket but, in fact, as the one thing that could threaten their leadership and their regime. It was economic diplomacy succeeding.
There’s still much work to do. I’ll be hard at it in the days and weeks ahead. But we have now set the conditions where the North Korean people can also have economic success. As the President says, a brighter future for North Korea does not come at the expense of anyone, but benefits us all.
There’s a long history of this, of us being successful. We forget about things like the Marshall Plan. We gave $110 billion – these were dollars of a long time ago – to Europe. We did it to provide assistance to our European partners when they needed help. But we’re now 70 years on from those days, and it is the case that we need to make sure that we re-evaluate each of those relationships so that we can continue to have great trade with Canada and great trade with Europe in the years ahead.
If you look around, there have been those that have criticized some of the tariffs. But just ask yourself: Would China have allowed America to do to it what China has done to America?
Take their aluminum and steel industries. China produces steel and aluminum in a way that exceeds domestic demands by far. They don’t want to shut down that production, and so the exported product. The excess product comes here to America, prices where American companies can’t compete.
This is predatory economics 101, and many other countries have recognized this. President Trump is now working to re-shift this balance.
Chinese leaders over these past few weeks have been claiming openness and globalization, but it’s a joke. Let’s be clear: It’s the most predatory economic government that operates against the rest of the world today. This is a problem that is long overdue in being tackled.
On NAFTA and Mexico, the President’s working hard. I am confident that we will get deals, deals that will be good for Mexico, a deal that will be good for Canada, and deals that will be wonderful for American workers. A lot changed in the 24 years since NAFTA was first put in place, and our goal is to achieve an outcome that rebalances that situation. We’re going to level the playing field for the American automotive industry and other sectors, incentivizing manufacturing here and not there.
This obviously matters a lot to you all here in Michigan; it accounts for 23 percent of all automotive production. Our NAFTA negotiating teams are working closely with our Canadian and Mexican counterparts, and I am very hopeful that in the coming weeks, we will be able to announce that we have agreements that I think the world will view as significantly better for the global economy. I’m an optimist by nature. My work requires it too. I know you are as well.
This region that was home to the Arsenal of Democracy in World War II has been on hard times for a bit, and there’s still a way to go. But we’re seeing this new growth; we’re seeing it in every big city in America. We believe in you in the Trump administration. We are confident that if we can help you gain access to markets and get trade rebalanced that you, the people here in Detroit, will be successful.
I’ll close with this: for every small company in America, there’s an opportunity. There’s an opportunity to access a place that you’ve never been or never seen or never known. I am convinced that if we at the State Department do our jobs well, that you too will be able to do that. And you’ll do it in a way that benefits you and your business and your family, and that’s great.
But the most important thing you will do is you will do that for those around you and for your community. And it’s that that drives us every day at the State Department to lead the economic team in a way that delivers American diplomacy every place in the world, and the American economy can continue to be the beacon around the world that it has been for all these years.
Thank you. Thanks for allowing me to be at the Detroit Economic Club. It’s truly an honor for me to be with you all today, and I’m happy to take just a – I used to say I’ll – I’d take a question about anything, now I say almost anything. So thank you. (Applause.) Thank you.
MR ANDERSON: All right. Well, Mr. Secretary, we do have some questions that have come in, both before the address and during it, and not surprisingly, given the presence of the auto industry in Detroit, as you mentioned, and the fact that so much of the country’s trade with Canada flows across our joint border here, there were numerous questions submitted on trade negotiations, tariffs and their impacts on relationships. So I’d try to sum up those questions by saying – asking what is your perspective on the impact of trade negotiations and tariff impositions on relationships with Canada. That was probably question number one, but similar questions for our close allies in Europe and with China.
SECRETARY POMPEO: I am convinced – I spoke with my Canadian counterpart on Saturday morning, Chrystia Freeland. I think she agrees. I am convinced when – when the trade negotiations are complete, that there will be more – more volume, more dollars and greater freedom of trade between the United States and Canada. I am completely convinced of it. I’ve seen the work that’s been going on. There were just some things that are out of whack, and that may be historic artifice or maybe that times simply move on – some things that didn’t match with today’s environment. And the President is determined to try and correct them. And I’d say the same thing about Europe and Mexico too. I’d put them all in the same bucket in that way.
But I think it’s also the case that our relationships with them are so much greater than just our economic relationships with those countries. When I spoke to Chrystia, we certainly spoke about tariffs and the things that were very much on all of our minds, but we work alongside each other in Ukraine. They have folks that are working with us in Afghanistan. She offered to assist in our efforts in North Korea. The Canadians have been incredibly important in that. I’d say the same thing for the European and Mexicans. Our relationship is not solely defined by trade, and so I am – I’m very confident that when these trade negotiations are completed that the historic relationships between the United States and Canada and the United States and our European partners will continue the way they have for now 70-odd years with Europe.
MR ANDERSON: Great. Not surprisingly, there were also a number of questions related to the recent summit with North Korea. So combining a couple of them, will a follow-up summit be necessary to build on and solidify the results of the recent meetings with North Korea? And what is the perspective of the Russians and the Chinese on the evolving U.S. relationship with North Korea?
SECRETARY POMPEO: So let me take the second one first. When I traveled to Beijing after Singapore, spoke with my Russian counterpart this morning at 8:15 Eastern, they are excited that there’s this opportunity. It’s their backyard, after all. To eliminate the proliferation threat, the nuclear threat in North Korea, is something that they have long stated they were desirous for, but there wasn’t a motive force to drive it. So I am sure our interests diverge in certain places there, but the core opportunity to fundamentally reshape how North Korea thinks about itself and its place in the community of nations – both Russia and China are fully on board with our effort.
As for whether they’ll need another summit, hard to know. There is a lot of work between here and there. My team is already doing it. I’ll likely travel back before too terribly long. There’s a great deal of work to do. We still have to flesh out all the things that underlay the commitments that were made that day in Singapore. I was there in the room with Chairman Kim. It was the third time I’d met Chairman Kim; twice in Pyongyang and there in Singapore now. He has made very clear his commitment to fully denuclearize his country. That’s everything, right? It’s not just the weapon systems, it’s everything. (Applause.)
In return for that, the President has committed to making sure that we alter the armistice agreement, provide the security assurances that Chairman Kim needs. And I don’t know if you’ve had the chance to see the video that President Trump showed Chairman Kim that day in the meeting, but it talks about – it shows what North Korea could be like: beautiful beaches, a wonderful place, successful. There is a lot of work to do to make that, but President Trump is committed to delivering on that part of the bargain as well. And if we can get those two done in a way that matches, we will have reduced a global threat that has bedeviled the United States and the world for decades.
MR ANDERSON: Great, thank you. Switching continents now, Africa appears to be evolving and transforming rapidly; and further, China is asserting itself on the continent. So the continent also has serious issues with extremist groups. Given all of this, what role can and should the U.S. play on the continent?
SECRETARY POMPEO: So, actually, my last trip as CIA director was to Africa. I traveled to six countries in about as many days, confronting each of those problems, frankly: the risk from al-Shabaab and al-Qaida in the Islamic Maghreb; working on economic matters as well in other parts of the country; and then in Djibouti to watch the Chinese building a port right next to a perfectly good, useful port, certainly to be designed ultimately to be a Chinese military facility.
So when I stare at Africa, I see two challenges. The first is, to the extent there’s Islamic extremism that threatens America, we have an obligation to go take it down and protect the homeland. But the second one is opportunity. I see enormous economic growth. The people growth there will be larger than anyplace else on a per capita basis, on a percentage basis, than anyplace else in world over the next decade or two. Economic growth is lagging behind, but there are places where we believe we can be successful at helping them climb quickly.
As we all know, continents surprise. When they have small economies, they can grow at 8, 10, and 14 percent a year. It’s not unprecedented. If we can put in place the building blocks, the ones we all know, right, the rule of law, property rights, sort of some of the central understandings of how economic growth take place, I am confident that that growth will occur with a model that looks more like the West than China. If you look at what China’s doing there, there’s a lot of money going in, but boy, those leaders are getting smart to it. That money’s coming at a price that they know isn’t about commerce and markets, but rather about ultimately calling the note when it’s time to exert political influence. And the African leaders are on to it, they’re deeply aware of it, and they’re looking for alternatives. An American presence, not just the government’s presence but your presence, has a real opportunity to both return capital to you, to get ROI on your investment, and to achieve an Africa that has interests that are much more closely aligned to those of us here in the West than in China.
MR ANDERSON: Great. Well, another situation that’s been in the news and was asked about has to do with Venezuela, and the question was: Venezuela continues to struggle with enormous issues, both economic and political. Is there a workable path forward there?
SECRETARY POMPEO: So it’s a big challenge. Venezuela has been the next great economic success story for the last 40 years. So I shall not predict that one more time, too much risk. The Maduro regime has proven tenacious and capable at maintaining power, and inflicting enormous pain on the Venezuelan people. We have done our best to allow South and Central America to take the lead at responding to this crisis and urged Venezuela to return to something that looks much more democratic than where they are today. We’ve used some of our sanction authority – economic sanction authority – to facilitate that, and I’ve – my – that’s probably the best role for the United States to play. They’re calling on democratic institutions to be regenerated and allowing South and Central America to take the lead in responding to it.
MR ANDERSON: This one is, I would say, more personal and about your role. So you’ve been in your current role for a relatively short period. Have there been any surprises? And how would you compare the challenges of leading the State Department with those of leading the CIA?
SECRETARY POMPEO: Yeah, they’re totally different. (Laughter.) First of all, when I was the CIA director, I never saw a camera and I was happy about it – (laughter) – so, a very different role.
Look, they have fundamentally different functions. The leadership challenge, though, is not terribly different. It’s not terribly different than the leadership challenge I had when I ran Thayer Aerospace or Sentry International. So taking large organizations and getting them to understand commander’s intent, and then giving them the – the people of those organizations the power and authority to go knock it out of the park. I’ve been incredibly blessed in both places, at the CIA and now at the State Department. I have incredibly capable people. America is sending some of its finest young people to come work at each of those institutions. Thank you for that.
My job as their leader is to make sure they clearly understand what it is President Trump is trying to achieve, and in turn, how I’m trying to implement those foreign policy goals for the President. And then to get the bureaucracy out of the way, which in a government institution is an art form unto itself, but to get that bureaucracy out of the way in a way that you can empower those folks to go – to really knock it out of the park on behalf of America, where they understand what it is we’re trying to accomplish and leave to them with all their talents to do it. So the leadership challenge, that’s not different than when I ran Thayer Aerospace. It was much smaller than these two, but creating that place.
I’ve talked about, at the State Department, the other element. We are all around the world, and the world is watching how America behaves. And I remind our officers – I had a chance to talk to our team in Seoul and our team in Beijing, in addition to the team in Singapore, reminding our officers that the world is watching them. So we have policies and there are things we’re trying to accomplish, but while we’re doing each of those tasks, the world’s watching our behavior. Do we tell the truth? Do we behave with courtesy? Do we treat every human being with the dignity they deserve? These are quintessentially American value sets, and if we do that, the good we will do in the process of trying to implement America’s values and interests around the world and achieve them will have the corollary benefit of, again, showing the best of what America is about. And that frankly is no different in my current role than it was at CIA, but very different than in the private sector.
MR ANDERSON: Well, maybe we will wrap up with one international question that’s a little closer to home, and that’s a question about Cuba. So Cuba now has the first non-Castro president in many decades. Do you continue to think we’ll grow closer with Cuba? How do you see that relationship evolve?
SECRETARY POMPEO: It’s true his last name’s not Castro. (Laughter.) But you wouldn’t know it from looking at his policies and plans. So I don’t see significant changes in the Cuban Government. Having said that, I do see significant opportunity. I think over time that its proximity to the United States, the nature of the human beings there, I think we – I think ultimately we end up in a much better place in Cuba. The question has always been speed, how quickly can you get there, and what are the right toolsets to reinforce that and make that more likely to happen. President Trump’s made clear he wants us to do that, he wants us to be engaged in ways that increase the capacity for ordinary Cubans to have the opportunities that we all have in America, both economic freedoms and political freedoms. And today we still have a lot of work to do.
MR ANDERSON: With that I am going to wrap up the Q&A session, but I just want to finish where I started, in thanking you for taking the time today to come to Detroit. Your message was great, and great for us to hear. Much appreciated. Thank you so much.
SECRETARY POMPEO: Great. Thank you all very much. (Applause.)