Informal Exchange With Employees at the Weyerhaeuser Industries-Port of Tacoma Log Export Shipping Facility in Tacoma, Washington

The President. Well, this is a first for me. This is the first time I've ever seen anything, and while I knew I was going to see a ship being loaded here, I hadn't quite pictured what it was like. And I just speculated here to Dick, in showing us around, if somebody punched a hole in the bottom of that, it still wouldn't sink— [laughter] —not with the load it's got here.

You know, coming in here I happened to remember a lot of years back that the first time that I came to Tacoma was for the premiere of a movie that I was in called "Tugboat Annie Sails Again." And I remember they brought us in the last stretch on a yacht. And they had fireboats out there, putting on a display and everything, and then that night they saw the movie. And the next morning, there we were all alone, out on a curb, trying to flag down a cab. [Laughter] Kind of a change of attitude-probably correctly.

Listen, I'm not going to stand here and try to make a speech or anything. I know we've only got a few minutes to visit, and it's just occurred to me there must have been some times when you've said, "If I had a chance to ask him, would I .... " Well, go ahead. If you've got a question or something on your mind, maybe we could have a dialog instead of a monolog.

Q. When do you plan to leave for China, Mr. President?

The President. What's that?

Q. When do you plan to go to China? The President. Leaving Sunday morning. The reason is, I'm, from here, going down to the ranch and have a couple of days on horseback. But it's all a thing of trying to break the change to the time zone difference. You see there are 13 hours time difference between there and our Washington time. Now here, it's 10 hours difference. And what we're going to do is have a couple of days there to get changed—this, 3 hours of it—and then we're going to stop in Honolulu for two overnights there and then one in Guam, and hope by that time that we're getting closer to their time. [Laughter] These last several days, you know, every once in a while I'd stop and think-you know here it is the middle of the afternoon, and what time is it in China? Well, it's the middle of the night. And I've been wondering about when I'm going to find my eyes closing, and it'll be at the wrong time. So, I think that everyone that's been there before says this is the way to do it. Somebody with something else?

Q. What will you be doing in China?

The President. Oh, an awful lot of meetings. It's really a working trip. Premier Zhao was in Washington, you know, and we made an exchange that after his visit I would go there. We'll be taking up matters that have to do with just what's happening here—in the dock trade matters—with them; negotiating out some tax differences so that back and forth, people not only working there but investment and so forth that they've opened up to American investment there won't be taxed double. We're hoping to negotiate out a number of things—and trade agreements that will build up more trade.

They have now become our third largest trading partner in the world. And I know I was just talking here that 5 years ago, they didn't import any lumber from the United States. In 1983 it was almost 800,000 board feet. And I think we can get that even bigger—increase it more.

So, the schedule is very tough, a very minimum of sightseeing. At least we'll get to see the Great Wall and a couple of things like that. But the rest of it is very lengthy meetings.

Q. Are you going to visit several cities while you're there?

The President. We'll mainly be in Beijing. We'll go up—among the sightseeing things, we'll go up to that 3,000-year-old capital where they've uncovered all those terra cotta soldiers and all, life-size figures. But that's just for a visit of that kind—and the Great Wall.

But then we'll go to Shanghai, where there's a lot of American investment now. In fact, I'll be going through a company there that is half and half. It's a partnership deal with an American private company and the Chinese Government. And also, visit a university outside Shanghai, and from there, home by way of Alaska.

Q. You'll be away for how long?

The President. Well, it's about 15 days from the start this morning from Washington. Now, the fourth day we'll be leaving— actually, we'll be 7 days in China.

Q. Is Nancy going with you?

The President. Yes. I'll meet her down in California. She left early to stop and visit her mother in Phoenix. Yes, we'll be going together.

Anything else?

Q. I also understand we're going to be exporting to Korea.

The President. Yes. Yes, and we've been dealing with Japan on more open trade and some changes in tariffs and so forth, particularly with regard to wood and paper products that they've kind of had a restricted market to us. We were there some time ago, and Prime Minister Nakasone is all—he really, honestly, and sincerely wants to have better trade relations with us. He's got some political problems, and I can understand that. I've got some, too. [Laughter]

Q. Mr. President, we've got time for about one more question, I think, and then—

The President. One more.

Q. Did you order this nice weather for today?

The President. I'll take it, though. [Laughter]

Q. Our jobs rely pretty heavily on the housing industry, and some of us younger guys are still trying to figure out how to afford our first house—[inaudible].

The President. Yes, and I know I'm going to be talking about that at this next meeting that I go to here. Yes, we know that this interest rate is still a problem. You do know, though, that the housing industry has staged a comeback that is unbelievable, almost, the rate. Now, there was a drop in March, but that drop was only down to about 1,600,000 starts, where the previous month it had been about 1,900,000. And so the whole average for this last year, since the recovery started, is very good. As a matter of fact, February was, I think, a record, an all-time record for housing starts.

There's no question that this is still a problem. Right now, those interest rates-there are two explanations for them staying where they are. One of them is on the positive side. They're up there because of the recovery, the old law of supply and demand. There is so much recovery going, and business investment in plant and equipment and so forth, consumer borrowing to buy, installment purchases and so forth, automobiles, heavy appliances and so forth, that that has kept it up. But the other one, I think, is just plain pessimism. The money market out there still isn't willing to let the money go on loan at a lower rate until they're sure that we really have got control of inflation. Well, inflation is now—this is going into the third year that we've had it down below 4 percent, and I think that they're being unnecessarily pessimistic.

I have a hunch that when the Congress comes back from this recess, if they'll go forward with this cut in spending that we want, this program to start whittling away at that deficit, I think maybe this could reassure the market, and we would see before too long the rates coming down again.

But I know what they mean to the housing industry, and I can only tell you that it is—right now, it's very healthy. And there's been a great surge, I think, because of the number of years in this recent recession that people have been standing by waiting to buy.

And, of course, I know your interest is only just passing in the housing industry. It doesn't mean anything to you. [Laughter]

Q. I'm afraid we're going to have to drag the President away.

The President. All right.

Q. Thank you.

The President. Okay. Well, it's nice to see all of you. Thank you very much; appreciate it.