Ted Cruz: Donald Trump Is Right About Trade, But "China Bad" Is Not A Solution

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CRUZ: Well, [on trade] Donald is right, for example, he was just talking about international trade. He's right about the problems. But his solutions don't work. So, for example, his solution on international trade, he proposed earlier a 45 percent tariff on foreign goods.

Now he backed away from that immediately and he may come back with a different number tonight. I don't know where he'll be tonight. But I'll tell you what happens. You know, we've seen prior presidential candidates who proposed massive tariffs, you know, Smoot- Hawley led to the Great Depression.

And the effect of a 45 percent tariff would be when you go to the store, when you go to Walmart, when you are shopping for your kids, the prices you pay go up 45 percent. But not only that, when you put those in place, because a tariff is a tax on you, the American people, but the response of that is that the countries we trade with put in their own tariffs.

A much better solution that works is the tax plan I've laid out which would enable our exports to be tax-free, would tax our imports, would not raise prices for Americans, and would not result in reciprocal tariffs. Fix the problem and that's what's missing from what Donald says.

TAPPER: Mr. Trump, we'll give you a chance to respond.

TRUMP: The 45 percent tax is a threat. It was not a tax, it was a threat. It will be a tax if they don't behave. Take China as an example. I have many friends, great manufacturers, they want to go into China. They can't. China won't let them. We talk about free trade. It's not tree free trade, it's stupid trade.

China dumps everything that they have over here. No tax, no nothing, no problems, no curfews (ph), no anything. We can't get into China. I have the best people, manufacturers, they can't get in. When they get in, they have to pay a tremendous tax.

The 45 percent is a threat that if they don't behave, if they don't follow the rules and regulations so that we can have it equal on both sides, we will tax you. It doesn't have to be 45, it could be less. But it has to be something because our country and our trade and our deals and most importantly our jobs are going to hell.​​

TAPPER: Senator Cruz?

CRUZ: Jake, let me be clear what Donald just said. He said that that 45 percent tax is a threat. And mind you, you are paying the tax. It's not China that pays the tax. It's you, the working men and women.

So ask yourself at home: How is this helping you? If your wages have been stagnant for 20 years; if you can't pay the bills, how does it help you to have a president come and say, "I'm going to jack -- I'm going to put a 45 percent tax on diapers when you buy diapers, on automobiles when you buy automobiles, on clothing when you buy clothing." That hurts you.

It's why we've got to get beyond rhetoric of China bad, and actually get to how do you solve the problem. Because this solution would hurt jobs and hurt hard-working taxpayers in America.

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