• With: Mitt Romney

    This is a rush transcript from "On the Record," December 16, 2011. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, Governor Mitt Romney goes "On the Record." And he has big news, news that has the other Republican candidates green with envy! Romney picked up the endorsement of South Carolina Governor Nikki Haley, and she is also here tonight to go "On the Record." Governor Haley will tell you why she says Governor Romney is the Republican candidate to beat President Obama.

    But first, here's Governor Mitt Romney.

    (BEGIN VIDEOTAPE)

    VAN SUSTEREN: Governor, nice to see you, sir.

    MITT ROMNEY, GOP PRESIDENTIAL CANDIDATE: Thanks, Greta. Good to be with you.

    VAN SUSTEREN: I see you brought some friends.

    ROMNEY: I have a few friends here in South Carolina. This is ... Very exciting.

    VAN SUSTEREN: I've been talking to them. They're very excited to see you, especially with the news of the governor here in South Carolina.

    ROMNEY: Big news. Having Nikki Haley come out and endorse my campaign sent a shock wave through the political circles here in South Carolina. I am delighted. It's a piece of very good news this week.

    VAN SUSTEREN: All right, all of us in the media have had our Blackberries and iPhones buzzing because earlier today in Iowa, you said something to the effect -- and correct me if I'm wrong -- that until you got involved in government, that you didn't know what Medicaid is. Do you want to explain that?

    ROMNEY: I didn't know the ins and outs of how the system worked. Actually, back in the 1980s, I was working in a health care consulting practice, so I, of course, knew how Medicaid exists and Medicare. But the particulars of how much the state puts in, how much the federal government puts in, how that works state to state, why, that takes getting -- well, frankly, when I was running for governor, I learned a great deal more about it, but even when I ran in 1994. But the programs generally, of course, I'm quite familiar with and was for quite a while.

    VAN SUSTEREN: Is it a little bit difficult that we seize on every single word, and we try to read something into it that someone doesn't know something or someone's slighting someone. Does that bother you at all?

    ROMNEY: You know, it's part of the process. I understand that. In some cases, it's a little silly, where people try and focus on a word and say, Oh, does this -- is this meaning something much greater than what the person intended? And then it gets cleared up and the -- I don't think the public focuses on those things as much as perhaps the 24-hour news cycle makes it appear.

    VAN SUSTEREN: All right. Everybody here is interested in the economy, across the country. So let me start first with what you would do about China. Day one, you say that you would declare China a currency manipulator.

    ROMNEY: Yes. Yes.

    VAN SUSTEREN: All right. Now, that would then empower you -- or the government to put tariffs on products coming from China, right?

    ROMNEY: Yes. That's right. It's very clear to me that China by virtue of having manipulated their currency, as well as having stolen intellectual property, designs and patents and technology, from America, as well as hacking into corporate and government computers -- is not playing by the rules.

    And we can all be worried about what they'll do as a response to our cracking down on them, but you just can't have people cheat year after year after year. And so at some point, you got to make sure that we protect our industries and protect our jobs and expect them to play on a level playing field.

    VAN SUSTEREN: But there are enormous costs in almost any decision a president makes. If we put tariffs on products coming from China, products in Wal-Mart, for instance, and products across this country -- they're all going to go up in price because we have to pay the cost of the tariff when we buy the product.

    Plus, we've got the problem that we owe China so much money, and they have a little bit of their foot on our throat. Plus, we need China in dealing with North Korea and nuclear weapons because we're friends with South Korea and Japan and we don't want another -- another situation with nuclear weapons in that country. So how do you balance all those issues?

    ROMNEY: Well, China hasn't been really helpful on the major issues geopolitically that we'd like to see their help in. They've stalled and held off on tough sanctions on Iran, for instance, and the great challenge of this time is a nuclear Iran. They belly up to some of the most reprehensible characters in the world, whether it's North Korea, Kim Jong Il, or whether it's Venezuela with Chavez, whether it's Burma, or Myanmar. They've tended to go with their own path, and that's their right, of course, but it's not like they're working with us in a highly collaborative way.

    But putting that aside, but if we say, Gosh, we're willing to lose American businesses and we're willing to lose jobs year after year after year because we're afraid of what China might do, that's an admission of extraordinary weakness, and we're not a weak nation.

    VAN SUSTEREN: What about the prices going up?

    ROMNEY: We have to do...

    VAN SUSTEREN: What about the prices going up on the products? Because we already are a very China product-consuming nation. I mean, we're up to our eyeballs in buying products from China already. So what do we say about that when all the prices go up and people are now squawking that they're paying more?

    ROMNEY: You know, if Chinese TVs cost more money as a result of saying to them, You got to play by the rules, then that's just the way it's going to have to be because I -- I'm not willing to lose American jobs so that we can buy tchotchkes or TVs from China. I want to make sure that we have China playing on a level playing field.

    Right now, they're discounting their products on a very dramatic basis, and in doing so, closing down American businesses, killing American jobs. And we can say, Oh, it's great, we're getting these -- these products cheap. It's little like saying, We're paying the cannibal to eat us last. It doesn't make sense. That's paraphrasing Winston Churchill, by the way -- his line, not mine.

    But we just can't keep on going or recognizing that China is not playing by those rules. We can win on a level playing field, but we can't have them hollow our manufacturing and our economy.

    VAN SUSTEREN: What about North Korea? Do -- what's your -- how would you handle North Korea? And I guess that sort of folds in the issue of China, as well. I mean, what would you do differently than the current administration or even the prior Bush administration?

    ROMNEY: Well, we've had very little progress over the years in dealing with North Korea. From time to time, they decide to negotiate with us. And in the negotiations, we promise to give them certain things they want, they promise to forebear from nuclear ambition. And then of course, we give them what they want, and they go ahead and pursue their nuclear ambition.

    I don't see that there's been a change in pattern. They'll want to negotiate with us again to get more free stuff from America. I think we have to recognize they have no interest whatsoever in giving up their nuclear weaponry. They're selling their technology around the world and -- their nuclear and missile technology. The facility in Syria that was bombed out by the Israelis was almost certainly a North Korean-designed and supported facility.

    We have to do everything we can to isolate them, to make them feel the pain of being one of the world's worst actors.

    VAN SUSTEREN: But what would you exactly do? Because we have tried to isolate them in the past. I mean, there have been times we've given them food, not given them food, given them fuel, not given them fuel. I mean, what exactly would you do? Because as far as we can see, they're going full speed ahead, and they're also the Wal-Mart of nuclear technology around the world. It's happening right no.

    So is there anything your administration would do different or would you sort of continue what's being done now?

    ROMNEY: Well, the best thing we can do with regards to North Korea is to have tough economic sanctions on them by virtue of their policies, make sure that their technology is not exported to places around the world that can use that technology against us or against our friends in the world.

    And then, finally, get China to act as a responsible neighbor. China represents about two thirds of their foreign trade -- pressure on China, encouraging China to act as a responsible member of the world community, recognizing that North Korea's not playing by the rules. That's something which would also help.

    VAN SUSTEREN: So how do we get back to handling China, to get China to do that? Because China hasn't done it. I mean -- I mean, there we're back to square one. I mean, how do we get these countries to actually do these things, to be responsible?

    ROMNEY: You know, we really can't tell everybody in the world what to do. We can tell them what we believe is in their best interest and what's in our best interest and we can encourage them by virtue of our interests and finding places of mutual interest to act in a way that's responsible.