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Then Trump's tough rhetoric against Iran, reportedly not slowing down Shell oil. The company's new plans with the country despite the President-elects pledge to undo that Iran nuclear deal. We're back in two minutes' time.
(COMMERCIAL BREAK)
BARTIROMO: Good Wednesday morning, everybody. Welcome back. Thanks so much being with us. I'm Maria Bartiromo, and it is Wednesday, December 7. Your top stories 8:30 AM on the East Coast, President-elect Donald Trump takes on China, as the country refers to the next commander-in-chief as quote, a diplomatic rookie. Trump picks the man to representing the U.S. in China. He has offered Iowa governor, Terry Branstad, the all-important position of ambassador to China. As the president-elect shakes his cabinet, meanwhile, his supporters are praising what he has done before even taking office.
(BEGIN VIDEO CLIP)
COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: People want a better country, they connect with Donald Trump. He understands the problems of the working class, he's fixing those problems already, as we see by bringing jobs, by keeping jobs here in America. The Clinton campaign they have fundamentally flawed campaign, they have a fundamentally flawed candidate, and they refuse to take any blame for the way that the campaign turned out. They blame everybody except themselves for it.
(END VIDEO CLIP)
BARTIROMO: The latest high-profile names continue to descend on Trump Tower today, we will bring you those names despite the uncertainty under a Trump administration. Shell said is set to move forward with plan to sign a deal with Iran, the potential fallout coming. Starbucks is looking to add a perk to your lives -- your entire life, the new contest that could give you an endless cup of Joe from Starbucks. So are they really built for tough, we're doing doughnuts in the desert, testing the new ford F-150.
Futures showing the markets will open flat, as you see there. We've seen a reversal of fortune in the least hour or so. Markets are now set to open lower, pulling back from has been a record-setting performance. Yesterday, the Dow Industrial closed at another all-time high, that is the 20th all- time high this year, the 11th since the Trump victory in the Election Day. In Europe, markets are rallying this morning across the board, take a look, the Dax Index leading the way up one and a quarter percent, the FT 100 also up one and a quarter percent this morning.
And a similar story in Asia, overnight, the major indices in the green with the Nikkei average in Japan, best performer up three quarters of one percent. President-elect Donald Trump moving forward with his foreign policy agenda, Fox News is learning that he is offering the key position U.S. ambassador to China, to Iowa governor, Terry Branstad, who has a longstanding relationship with Chinese president, Xi Jinping. This comes after President-elect Trump's recent war of words with China, over his phone call with the president of Taiwan, ending with Chinese state media calling Trump, quite, a diplomatic rookie. Joining me right now is the author of, the coming collapse of China, Gordon Chang. Gordon, good to see you. Thank you so much joining us.
GORDON CHANG, AUTHOR: Thank you.
BARTIROMO: Your reaction to Trump -- this potential appointment.
CHANG: Of the ambassador?
BARTIROMO: Yeah, the governor of Iowa, right.
CHANG: This is a terrific thing because he does know Xi Jinping. But we've got to remember that relations between the U.S.-China have really very little to do with friendship. The Chinese are ruthlessly pragmatic. And even though the governor knows Xi Jinping since the 1980's, it isn't going to matter because Trump's has policies, Xi Jinping has policies. They're mutually inconsistent. This is going to be a fight, and so the pick of ambassador is maybe less important than we would like to think.
BARTIROMO: This is pretty incredibly, since this was one of Donald Trump's sticking points throughout the campaign. He didn't like China devaluing the currency, he didn't like cheap goods being dumped in America, so we saw -- we see a fight coming.
CHANG: It certainly is. And, you know, it is not just the 45 percent tariff, which probably will never be imposed, but what we're seeing though, and this is going to really hurt China, and since that you have Trump reducing taxes, cutting regulations, he's going to create a boom. That's going to take money out of China. And that's what is going to really hurt them in the long term. You know, this soft bank announcement yesterday, it means that investment dollars that would have gone to China, and would have gone to maybe other parts of Asia, are now going to come in to the U.S.
LEE CARTER, FOX NEWS CONTRIBUTOR: So now, is this going to hurt China's economy?
CHANG: Oh, yes. It's fragile right now. It's not growing at the 6 or 7 percent pace that they claim. It's maybe now about 3 or 4, but the big thing is debt, they're adding debt to create that growth. So they've got real problems, and all you have to do is just nudge it a little bit as we've seen from the renminbi, the currency, which is now near 8-year lows.
DAGEN MCDOWELL, FOX BUSINESS NETWORK: China reacts though in a retaliatory way toward the United States, what do we need to be concerned about in terms of how they might react?
CHANG: Well, they certainly will react. But last year, China had $334.1 billion trade surplus against the U.S. In trade wars -- trade deficit countries like the U.S. has nothing to worry about. And we should know that, because during the great depression we were the world's great trade surplus country. And guess who got hurt the most in the 1930's, it was us. So, yes, they'll huff and they'll puff, and they will try to intimidate us because they got more political will. But, nonetheless, we hold all the cards.
KEVIN KELLY, RECON CAPITAL CIO: Right now during the authoritarian government, right, and it's like.
(CROSSTALK)
KELLY: Yeah, exactly. And they're like predictability when they're dealing with other nations. That we cooperated on climate change with them, and the Iranian nuclear deal, now it seems all bets are off with the new administration on that. So where do you -- what do you see happening with those two deals.
CHANG: Well, you know, climate change -- the Chinese are going to honor their promises because their co2 emissions declined last year, somewhere between 0.7 to 3.4 percent. So they're already honoring the promises they made. But that's because their economy is such trouble. Last year the manufacturing sector contracted. On the Iran deal, I don't see very much cooperation, because Iran isn't that violating that agreement. This is going to cause problems down the road, whether you have a Trump or a Clinton as president, you know, a U.S. president is going to have to something to enforce that deal, whoever he or she would have been.
BARTIROMO: What do you think about Chinese state media slamming Donald Trump? They're saying that, you know, the diplomat -- that they -- they're basically mocking him. Do you think this -- I mean, is that the Chinese government sending messages out to state owned media?
CHANG: Oh, surely, because whatever they say about Trump has got to be cleared at the top of the political system. You know, China's official reaction, which was there protest filed on Saturday, was very measured. And I think that the reason is because Kissinger just saw Xi Jinping, he saw Trump yesterday. He certainly was carrying messages from China. And I don't know what that back channel looks like, but clearly at this point, there's a two level, they're sort of nice, maybe on the back channel, but clearly on state media they're making a big mistake I think.
BARTIROMO: How come we haven't tried to fix this relationship before. I mean, if it's been going on for so long, whereas you're not allowed to have American business or any foreign business own certain segment, there are ten industries within China that are being deemed off-limits. There aren't we know that. And them, even if you want to invest, you can only own 49 percent of a joint venture. How come we never.
(CROSSTALK)
CHANG: Two things, first of all, we want to integrate China into the international system, and so, we don't want to upset them. And second of all, you know, a lot of people say, well, they own the 21th century, so we shouldn't upset them. Now, both of those assumptions I think are wrong because, you know, Chinese could be villain, but we permitted them to be villains. And until we start imposing costs on unacceptable behavior, the Chinese, of course, are going to do things that we don't like. You know, whether you talk from a geopolitical or economic point of view.
KELLY: Well, they consistently seal their I.P., I mean, that happened time and time again. I mean -- and they're taking our companies out of there. I mean, look at what happened -- even with Uber, we've talked about this, Uber couldn't even operate over there. And D.D. actually took over and they had to strike a deal, otherwise, they were toast.
CHANG: Yeah. Uber, succeeded everywhere in world but China.
BARTIROMO: That's true.
CHANG: You know, on I.P. -- that's what you mentioned, U.S. losses somewhere between 300 billion to 600 billion a year on I.P., about 75 to 80 percent of that is lost to China. You know, this is with definition of a trade war, and, you know, but we just don't recognize it. And, you know, we have not protected our networks, we haven't imposed those cost on China. So, of course, the Chinese are going to steal everything because we have left the door open, and turned off the burglar alarm.
KELLY: But can we use the WTO to our benefit in that regards.
CHANG: Well, you can, but you've got to remember that the WTO dispute resolution mechanism favors predatory action because there is no cost for predatory action until there's an arbitration decision against the offending country. That gives a country two to three years to cheats, and China takes advantage of that all the time.
BARTIROMO: Real quick, in your book the coming collapse of China, when did you write that?
CHANG: I wrote it in 2001, I said it would happen by 2011, I am out of time, but it does looks like it's starting to happen. And especially if Trump, if he engineers a strong U.S. economy, that could very well do that.
BARTIROMO: Wow. All right, Gordon, we will be watching. Thanks so much, Gordon Chang joining us there. Coming up next, President-elect Donald Trump will be heading to Washington today. He's looking to Silicon Valley though, for some helps. Stuart Varney will weigh in on this technology roundtable that's taking place next week. Then, the perfect for coffee lovers, how you can win free Starbucks for life this holiday season. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, 45 minutes away from the opening bell. The market is now looking negative at the opening of trading this morning. Although coming off of a record-setting performance. Couple of names on the move this morning, shares of Royal Dutch Shell inching higher on the news that the company is signing a deal with the national Iranian oil company to develop an oil field in Iran, the plans come as uncertainty surrounds the future of that Iran nuclear deal, with President-elect Donald Trump vowing to do away with the agreement. The stock is up better than 14 percent so far this year. Starbucks is sweetening the deal for members of its loyalty program with its Starbucks for life competition, that awards seven winners a lifetime supply of the company's food and beverages, shares of Starbucks are down better than 7 percent year over year. Well, Trump versus Silicon Valley? The president-elect is inviting technology leaders to a roundtable discussion next week, December 14th. Joining us right now the host of Varney & Co., Stuart Varney to weigh in. I wish I could be a - - spider on a wall for that one, Stu.
STUART VARNEY, VARNEY & CO. HOST: Yeah. Do you think that's right? Is it Trump versus Silicon Valley, I think it is. I think he's going to muscle them. I think he's going to say, hey, you didn't support me during the election, you're keeping hundreds of billions of dollars overseas, you manufacture overseas, what are you going to do for me now? I am the president of the United States of America, damn it, what are you doing to do for me? I think that's the way it's going to go. I may be totally wrong, but I think that what's going to happen. That's the Trump playbook, isn't it. You go in from a position of strength, you open up with a negotiating position, and you take it from there. I think he did that with Carrier, looks like he's doing that with Boeing. I think he's going to do it with Silicon Valley. And as you say, Maria, I just love to be a fly on the wall of that one.
BARTIROMO: Well, it was Peter Thiel who's on that invitation. He's the one Silicon Valley, you know, outside first, and he was basically -- he was supporting Trump the whole time. And he did a great performance at the convention and the debates.
VARNEY: Yes. I mean, Trump's got a lot of leverage here. He is going to reduce the corporate tax rate to 15 percent. That is a huge advantage for Silicon Valley. Will they return the favor by bringing all of that money back to the United States. I think it's a leverage there for Mr. Trump. And, you know -- what about the antitrust threats against Google for their near monopoly on search against Amazon for their dominant position in online selling. I think Mr. Trump has some leverage here.
MCDOWELL: Hey Stuart, it's Dagen.
VARNEY: Yeah.
MCDOWELL: Those companies and their progressive leaders have had an easy rod, and very easy access to the White House over the last 8 years. And the Wall Street Journal has an editorial today about Google trying to hire a conservative outreach individual, -- from Washington. But you're talking about an influence on everything from copyrights, to privacy regulation, you name it, they've been able to do it. And I will save this for the final thought. But, again, this is a different world for these companies, and they better drink their coffee before they go.
VARNEY: I think you're right, Dagen, I do. I don't think there's any -- coincidence here that Foxconn is reportedly looking at expanding operations in the United States. These are the people who build the iPhone and all other bunch of technology products in China. They're under pressure, and now they're saying, well, we'll look at expanding operations in the United States. I think, Trump's pressure is already showing, maybe some small return.
BARTIROMO: Did you hear Dagen, earlier, when she told us this is great story, you're going to love this, that Google is now reaching out to get some conservative to help them with their message. Dagen, what did you.
MCDOWELL: Google lobbyists -- this is in the Journal, executives and other affiliates visited the Obama White House 427 times between '09 and 2014.
BARTIROMO: Four hundred twenty seven times.
MCDOWELL: And there was the top lobbyist at Google, stop by more than any of her counterparts in the industry combined.
VARNEY: Well, wasn't -- didn't Eric Schmidt, executive chair of Google, didn't he ran President Obama's technology operation.
BARTIROMO: Yeah.
VARNEY: . which really helped him get elected. And I believe he was in the room when President Obama was reelected in 2012, having just arranged all the technology for that reelection. Google, Obama's Democrat, leftist, progressive connection.
(CROSSTALK)
KELLY: One thing that we're not talking about is this -- will also be about immigration, Silicon Valley wants HB-1 visas, and Peter Thiel has been all about it. So that's the main thing that I think will be discuss about this is immigration, immigration, immigration.
VARNEY: Very good point. I think that's extremely important. That's something that Silicon Valley wants, and it's in the power of Donald Trump to accept and give, that's negotiation, that's the only cost.
BARTIROMO: All right, Stu, we'll see you about 10 minutes.
VARNEY: Sure thing.
BARTIROMO: Thanks so much. Varney & Co. begins top of the hour, 9:00 AM, join Stuart in the next 10 minutes. Coming up, rule of the road and off the road, we're taking the new F-150 raptor for a little test drive in its natural habitat, the California desert. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Donuts in the desert, Ford's latest version of the F-150 ready to tackle the elements as it hits the showrooms today. We have a special look. Joining us right now from Borrego Springs, California, is foxnews.com automotive editor, Gary Gastelu, with the latest on the F-150 Raptor. Gary, good morning to you.
GARY GASTELU, FOX NEWS: Hey, how are you doing, Maria. We're here -- this is the actual place where they came to develop this truck, which is basically an off-road racing truck that you can buy from the showroom. Ford actually just ran one of these in the Baja 1,000 race down in Mexico. Packed it up at the end of the race, drove it back to the United States. You can pretty much do the same thing now, if you go buy one of this yourself. They hit the showroom this week, after slight delay that executives here tell me was due to software upgrades they needed to make. They got a backlog of trucks they need to work through, but they should have everything caught up by the end of the year, so some of these could be under the tree just in time for Christmas.
Let me tell you why it's special, this is the most powerful F-150 they ever made, Ford new 50 horsepower, twin turbo charge V6. It's got a new 10 speed automatic transmission, that's kind of what they had to work on a little bit. I think at the end there developed that in conjunction with General Motors, if you could believe that. It has a computer control all- wheel drive system that covers every type of terrain, mud, sand, it's got a Baja setting for terrain like this out here in the desert. And really what makes this special is the suspension system. The suspension go up and down, it's got 14 inches of travel in the rear, 13 in the front. You can drive over -- I'm sure you can see in that video, just like a motorcycle. I was cruising in the desert around 75 miles an hour yesterday. And I might as well have been on the highway. Ford came out with the raptor, originally, seven years ago. Turned out to be the Ford performance division best-selling vehicle, even better than the Chevy Mustang, really tells you where the market is right now, as far as trucks and performance are concerned.
BARTIROMO: You mentioned Chevy, the competitor Chevrolet announced plans on selling Colorado, Silverado in China. Now, Ford is trying to ship those F-150 Raptors to China as well, next year. So why is now the best time to start selling trucks in China? We've been talking about China all day, what I like about that f-150 is looks all rugged, and you know, big wheels on the outside, but on the inside is all pure luxury, isn't it?
GASTELU: Yeah. That's why people like this. It's very -- it looks great. A lot of people do buy it, they come out here, places like this and play with it. Some people do buy it for the street. Over in China, tell you why they're going to sell them there, people are importing this on the gray market and selling it for 3 or $400,000. Sticker price here in the United States is $50,000, it's really is a bargain at that price. They haven't announced pricing in China, not going to be that much from Ford. But even with the 25 percent tariff they have to deal with, big thing they have a pretty big market over there for it.
MCDOWELL: I could definitely see you in a pickup truck.
BARTIROMO: I like it.
(CROSSTALK)
BARTIROMO: I'm sorry, what?
CARTER: I said I've got a $85 rock with that $10 cup of coffee. I mean, three-times, four-times.
KELLY: This is an expensive vehicle, and we have seen that auto sales have started to kind of plateau here, as well as the subprime lending markets starting to show some cracks though. So there are some worries in the auto-market, but differentiating yourself from a car like this is helping stabilize.
MCDOWELL: Number one selling vehicle in the country, though, Ford F-150 -- the Ford F-series pickup trucks, I think since the 70's, right, Gary, like 40 some odd years?
BARTIROMO: Big success story, Gary Gastelu.
KELLY: Yeah.
BARTIROMO: Thank you so much, Gary Gastelu, there, live this morning with the F-150. We've got final thoughts from our all-star panel next. Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Final thoughts, Lee Carter.
CARTER: So Donald Trump -- it's a big week, this week. I think that we should just continue to watch for these symbolic actions and gestures, like the Boeing comments, like Carrier deals. And like it or not, he's starting conversations that need to be had.
BARTIROMO: Yeah, that's true.
KELLY: I would defer to Dagen, she's got a great one.
MCDOWELL: Remember Pearl Harbor and all the men who sacrifice their life, all those sacrifices -- and then the teenagers who lied about their age to enlist and fight for our freedom.
KELLY: Amen.
BARTIROMO: Absolutely. A big shout-out for you, thank you. Kevin Kelly, Dagen McDowell, Lee Carter, we'll see you tomorrow. "VARNEY & CO." begins right now. Stuart, take it away.
END
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