00:00:00
What was the feeling the first time you were on Air Force One? >> It's just
00:00:04
>> or Marine One like is there a special thing where you're just like what is
00:00:07
going on? Like are >> Yeah. >> Yeah. When you're on these things like
00:00:13
it's amazing. >> Yeah. >> Right. You're you are where real conversations happen. We went to see uh
00:00:22
>> Putin. So I get on Air Force One at 5:00 a.m. He gets on at 5:45. We fly to um Alaska.
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>> Alaska. Right. >> Okay. >> Right. >> So, we're talking about then we we're
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there for four hours with Putin and then we fly back. Now, uh Marco Rubio and Steve Wickoff go take a nap because we
00:00:46
have to wait for Zillinsky to wake up to call Zalinsky and we have to wait for the European leaders to wake up, right?
00:00:51
Because it's the middle of the night. So I stay up with the president and we're
00:00:55
just chatting like we're just chatting watching golf. I mean we just like it's
00:00:59
a lot of hours. >> Yeah. >> So then Zalinsky wakes up. Uh so they get on the phone with Zalinski and he
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talks to Zillinsky on his phone and then when he calls the European leaders when
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they get up they want to have us only secure call. So there's three secure handsets in his office. So he's on one,
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>> Rubio's on one, and Wit Coff's on one. And I'm just sitting on the couch.
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>> This is in in Air Force One. >> In Air Force One in his office in the
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Air Force. So I'm just sitting on the couch >> and I've been up for like 20 hours,
00:01:31
okay? >> And uh and the president's been up for 20 hours, but he's on the phone and the
00:01:35
European leaders are talking. So I'm just sitting there and they're all on
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handsets, so I can't hear a word that anybody's saying. And I'm just sitting
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there. So I uh >> I fall asleep. >> Okay. So I'm just sitting there. They're
00:01:46
talking on the phone like right there and I fall like this. So I'm like that.
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So Wickoff elbows the president, right? Points to me and then he uh the president unrolls
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a Tootsie Roll and [laughter] like tries to throw his kid into my mouth. Yeah. [laughter] He hits me in the face.
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I'm like I wake up. He goes he goes, "Har, while you're napping, we're trying to
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settle world peace." >> That's awesome. I'm [music] going. Well, welcome everybody to the all-in
00:02:26
interview. I'd like to welcome Secretary Howard Lutnik, our esteemed Secretary of
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Commerce. When we did the first interview with you, it was at the beginning of the administration. It was
00:02:38
almost a year ago, and to be honest, it turned out to be one of the most popular
00:02:43
things we've ever done. There's the Elon Musk view factor, but then there was the
00:02:48
Howard Lutnik [laughter] view factor and they were pretty much side by side actually. It's great that you gave us a
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chance a year later to come back and talk to you. Let's just start with the general look back for you. How has the
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year gone and specifically I I would love to understand what surprised you as a businessman
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walking into the government. Let's just start with that. So overall, you know, I have a goal, which is uh I
00:03:16
want to be the cabinet secretary who has the most fun, >> right? And so I set out with that goal.
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>> And uh which means I am outcome driven, right? I don't uh I don't really buy
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into I worked really hard at something and it failed. >> If I worked really hard and it failed,
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>> it's a fail. >> It's a fail, >> right? If I got lucky and it just all
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fell into place and I did nothing, it's still success, >> right? [laughter] Because the outcomes
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are what matter, right? >> You know, you're not telling people how hard you worked and failed,
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>> right? >> So, um, how you get things done in government is fascinating.
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>> It's just different. What happened is most people who've ever been in
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government tend to be incremental. They come in, they say, "How did this work?" So someone explains how they work
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and they try to move the ball 10% forward. >> They don't really rethink it entirely.
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And so my objective was to come into this department which is an awesome, incredible diverse department and really
00:04:25
think through its powers and its possibilities, reimagine them, rethink them, hire
00:04:32
people and then mold those people to think outside the box. And so the first three months was really
00:04:39
getting people to think, can can I really challenge this? Can I really do this? Can I really try to do this? And
00:04:45
then trying to convince everybody around me that this is an okay way to do it. You the way it was done yesterday
00:04:54
isn't right. It was just what they did yesterday. You're not even saying it's
00:04:58
wrong. You're just saying it's not you. >> Do you get the organ rejection though of
00:05:01
career bureaucrats who think, "Wait a minute. Howard's out for my job or this
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is just a totally different way of doing things. I don't feel comfortable with
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this. I don't necessarily agree. We hear a lot about sort of this deep state,
00:05:16
whatever that is, like this career lifers that sort of push back on radical change.
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>> Well, look, in the beginning, we cut, you know, 20%. Like I I walked in the
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door here with 52,000 people in this department >> and now there's 40,000 people in this
00:05:34
department. So, the idea is if you're going to cut 12,000 people, you have to
00:05:39
do it fast. Right? >> So that everybody understands the next shoe is not going to drop tomorrow.
00:05:47
Right? And find where we had programs that just were like this program was started in 1978. You'd be like, why are
00:05:56
we doing it now? We had a department that was supporting advanced manufacturing set up in 1986. What were
00:06:05
they doing as advanced manufacturing 40 years ago as opposed to what people are doing now? Right.
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>> So that so it was really not taking out what's the core. And so we did that
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quickly and then you know I went and met every bureau um had town halls. I went to their offices
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and I basically told them where we were going, what we were doing and why. What I learned about
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government is the people here are very narrow. experts. They're amazing their knowledge
00:06:44
of this particular topic. >> So there's not generalists in government, but you have someone who's
00:06:50
great at this, someone who's great at this, someone who's great at this,
00:06:52
someone who's great at this, and then your job as the secretary is to weave that blanket together, right?
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>> So that these specialists succeed. And so when you give them tasks that maximize their capacity, they get
00:07:10
jazzed, >> right? >> And so I'm getting amazing output from this department because they're jazzed
00:07:18
because someone appreciates their capacity and is driving it to success. I want to jump into some of these
00:07:26
verticals of expertise that you oversee, but it may be useful for the audience actually if you just gave an overview of
00:07:33
the scope of commerce because it is incredibly vast from trade to job creation to Noah to the Census Bureau to
00:07:42
spectrum. There's a lot of things that you can shape on behalf of the United
00:07:46
States. >> So tariffs, which have been a big conversation, there's two types of
00:07:52
tariffs. There's general tariffs that's in front of the Supreme Court. And then
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there's sectoral specific tariffs. Those that are specific, industry specific are
00:08:04
in this building. Okay. Yeah. And they're part of BIS, the Bureau of Industry and Security, right? And and
00:08:12
that is both where we have export controls. We don't want to sell our best chips to our adversaries. We don't want
00:08:21
to sell whatever is the fill in that's the Bureau of Industry and Security or
00:08:29
uh do we want a license just to make sure you use it in this sort of way or that sort of way. Yeah. All of that is
00:08:35
and they have guns and badges. >> Right. So they have guns and badges. >> Yeah.
00:08:39
>> Right. because they have to protect and defend that. And they find people and
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that's and they also control the auto tariffs, the steel tariffs, uh pharmaceuticals, which we can talk about
00:08:50
a bunch because it's been insanely successful driving down the price of uh pharmaceuticals in America. And um so
00:08:58
that's the Bureau of Industry and Security BIS. Then you have ITA um which basically is the advocate for business,
00:09:08
right? We're I'm the secretary of commerce. So that's like a fun job. Like
00:09:12
you're in charge of commerce. So we help companies sell things around the world.
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>> That's our job. And we help states sort of bring in business to build and grow
00:09:26
here. So we're sort of the import export assist model, right? So we're always
00:09:31
helping Boeing, you know? So the guys, the senior executives of Boeing follow me around like a puppy because
00:09:37
everywhere time I do a deal and if you look at my big deals at the end it says they buy 50 Boeing planes, you know,
00:09:42
they buy 100 Boeing planes. So we're always helping American companies sell overseas and we're helping companies
00:09:51
invest in America. Right. >> Right. Help them help them with their permits. Help them with whatever they
00:09:57
need to build and grow so we can grow our American jobs here. So those are those are two examples. Then we have um
00:10:04
NTIA right telecommunications that includes spectrum like how are we going to do 6G like how are we going to do 6G
00:10:14
like how how do the pieces fit together that's our responsibility as the lead
00:10:18
advisor >> right and then inside of that of course we have >> the AI the center for AI uh advancement
00:10:29
right so we study and then we put out reports Like when Deep Seek comes out with their
00:10:34
new model, right, and there's all this press about it, our department literally painstakingly
00:10:43
studies it as compared to our models and publishes what's the difference, >> right?
00:10:48
>> So that we actually there's a standard of knowledge, >> not you know the press making this that
00:10:55
or the other thing. So and then we put out GDP, right? and we analyze and what's
00:11:02
interesting about GDP is people don't realize what we do is we use the census
00:11:07
so there's business census calling around to companies uh and it's not really calling around anymore it's more
00:11:14
you know economic connection to companies through APIs and otherwise and and one of the keys for me is to uh to
00:11:21
get rid of everything that's manual that's left and make it all automated
00:11:25
make it all connected with APIs make it all make it make sense that you can do it amazingly well.
00:11:32
Create GDP and then we put GDP out on the blockchain because if I'm publishing
00:11:37
GDP, why not? >> Yeah. >> Like where where's the holdup? >> And you started doing that in July, I
00:11:43
think. >> I mean, how fun is that to say, why don't we do that? And then, you know, we
00:11:47
go to the Oval Office, I chat with the president, he goes, great. And then we do it. I mean, the reason you want to
00:11:53
work for President Trump is his intuition is so extraordinary and his knowledge base is so amazing that
00:12:03
>> I can go in and talk to him about should we put GDP on the blockchain and just
00:12:09
before that he was doing something completely different, something completely different. And then he'll
00:12:14
chat with you about 3 or five minutes and it goes that sounds great and then you just go do it.
00:12:20
>> So it's really fun. We have the patent office, you know, and uh if you think of
00:12:24
how valuable intellectual property is, how do we protect it? How do we defend it? What's
00:12:29
the right way to think about it? So, and you have Noah, which is uh you know, we
00:12:34
have inside of Noah, of course, is the word atmosphere, right? It's oceans and
00:12:40
atmosphere. What does that mean? Oceans and above 50,000 ft is space. Space commerce. So I have now the office of
00:12:50
space commerce which I've taken out of Noah and have put in my office so that I
00:12:56
can reimag how do we handle commercial satellites. >> Okay. So we're going to dig into as many
00:13:02
of these areas as we can but let's go back to the first one. So can you bring
00:13:06
us into the room leading into April 1st and >> April 2nd? >> April 2nd. Sorry. [laughter] and bring
00:13:12
us into the room debating tariffs, debating where you wanted to start, debating the game
00:13:19
theory, what were the puts and takes and how did you come up with the decisions you made and then if you could just
00:13:25
reflect back on what went right, what would you want to redo and what was maybe and it still is misunderstood. So
00:13:35
the president in his first term u he's been talking about tariffs and how the trade deficit of the United
00:13:45
States of America is really a ripoff of America that uh people who don't weigh
00:13:51
in very deep say well you have a a trade deficit with the supermarket right you know I mean you're always buying from
00:14:00
the supermarket so you have a trade deficit with the supermarket. That's that's just silly, right? If you think
00:14:07
about it, let's say there are two islands, right? One produces and one invents. So, the inventor lets
00:14:16
the other island produce and keeps buying it from that other island, pays them the money, and that that other
00:14:23
island uses the money to buy the inventor's island. And over a period of time, the producer owns the
00:14:34
inventor's island and the inventor works for the producer because he ran an infinite trade deficit and kept paying
00:14:42
his money away. So what's supposed to happen when I was in college, my uh you know freshman and sophomore
00:14:52
professors basically said if you run a trade deficit, you'll keep taking your
00:14:58
silly paper money and giving it to them and buy their wine and buy their cars and buy all their cool stuff and sooner
00:15:05
or later they're going to say, "Hey, I don't want your stupid paper." And your
00:15:09
dollar would devalue. you wouldn't be able to buy their stuff and it would all balance and that's sort
00:15:16
of free foreign exchange floating currency theory. But what if you're America and
00:15:25
you invent the light bulb and then you invent the transistor and then you invent the GPU and you're just too darn
00:15:32
smart. >> So what they do with those dollars >> is they come in and buy us. In 1985,
00:15:41
we had net ownership of the rest of the world. So comparing the rest of the world's ownership of America and our
00:15:48
ownership of them, that counts everything, their bonds, companies, stocks, every everything.
00:15:53
>> Everything. >> We were net an investor of $148 billion. More of them than they owned of us. Fast
00:16:01
forward to 2024. 26 trillion the other way. They own 26 trillion of us more more than we owe
00:16:14
them. >> What you're saying is we became effective employees of the people that
00:16:19
were producing the things that we created. >> Right. So when we call So the beginning
00:16:24
so Donald Trump says we're getting ripped off. We need to fix this. >> Mhm.
00:16:28
>> Right. and and sort of like these junior economists fight it and say no.
00:16:33
>> Let me let me just stop for a second. That is the first time I've heard that
00:16:36
it is an extremely elegant framing actually. It sets up an incredibly powerful way to measure the
00:16:43
effectiveness of tariffs, >> right? >> Which is And is that how you think about
00:16:47
it? Which is that imbalance is the north star? >> Yes. >> Once we own at least the same of them as
00:16:55
they do of us, >> that's balance. >> That's balance. We're balanced,
00:16:58
>> right? And right now we're at a $26 trillion. >> Why would we
00:17:03
why would we have? So what happens is you call a country up and you say, "I'm
00:17:07
going to set a tariff." They say, "Wait, wait, wait. Before you set a tariff, how
00:17:11
about this? We'll invest $200 billion dollar in your country and Toyota will
00:17:18
build a factory and and Seammens will build a factory and they'll all build a
00:17:22
factory and and I'm like you're just buying us, >> right? >> You're literally buying us. I understand
00:17:31
what's better for you investing 200 billion in America or investing 200 billion
00:17:39
where where's better than investing here? So what happens is that natural argument which was always
00:17:50
previously successful falls on deaf ears. And I'm pointing over there because that's his office.
00:17:56
Okay. The White House is like right there. And uh it just he says you're only investing here because it's great
00:18:03
for you. The answer is I want to rebalance and that's what we're out to do.
00:18:11
Build it here, sell it here. Fine. Fine. Or pay for the privilege of selling it here.
00:18:23
>> How did you set the rates? >> Well, the president on the campaign trail had
00:18:32
uh two views. The the the debate and he was really uh debating with the team and
00:18:39
inside his mind. Does he want to set a universal tariff or a specific country bycountry tariff?
00:18:48
Obviously universal tariff it's easy you know Tuesday morning you say >> pick a number
00:18:56
>> 10% shazam >> right >> but we settled on a country specific model much more
00:19:04
complex much more difficult but much more nuanced much more clever uh and much tougher and he couldn't do that in his
00:19:13
first term >> because he didn't have believers around him. He had too much of the
00:19:20
people who who believed that that sophomore professor's ideals. And even though we were out $26 trillion,
00:19:30
you know, they they they thought that was too casual a comment. And so, uh, this administration came in with
00:19:39
incredibly sharp people, me included, Jameson Greer, uh, Scott Besson, who were on side,
00:19:47
>> on board driving for these outcomes. >> Let's double click into a couple of
00:19:52
these deals because some of the terms you got, it would be just great if you could walk us through how you convince
00:19:57
them. So, let's look at Japan. So the Japan trade deal you walked out with I
00:20:03
think it was $550 billion of commitment and terms I I mean I mentioned on the sapot I've never seen terms like this
00:20:10
before [laughter] um which you can explain which is basically you know Japan gets your money back then you get
00:20:15
90% of the profits but can you just walk us through when you go into the room with the Japanese government just get us
00:20:21
to the outcome how do you negotiate that deal with them? Okay. So, let's spend
00:20:24
some time in Japan because it's really it's it's fascinating. So, when thinking about Japan, I reminded
00:20:33
the president in 1853, Admiral Perry went with an armada and cannons and still had trouble opening
00:20:43
the Japanese market. Right? So the Japanese market for cars as an example, 94% of cars driven in Japan are
00:20:53
Japanese. They don't drive German cars. They don't drive Korean cars. They don't
00:20:57
drive American cars. The only American cars really in Japan are Chevrolets driven by the Yakuza. So you know, I
00:21:04
mean, you can't come home with a Chevy and people think, "Woo!" You know, you
00:21:09
got a new job, did you? So, right. So it's a culturally, technically, and economically closed
00:21:19
market. So even if you opened it technically, and even if you opened it economically, you may not be able to
00:21:25
open open it socially. >> Mhm. >> So what we did is we said, "All right,
00:21:31
you're going to pay a 25% tariff." Simple. You won't open your market,
00:21:38
right? I can't get you to really open your mark. So, you just pay us 25%. And uh and that's simple. We don't have
00:21:46
to negotiate, you know, we just pay for the right and the math will fix itself over time.
00:21:51
>> Mhm. >> So, their leadership called and said we we can't to do that.
00:21:58
And you know, >> when someone says I can't do that, I'm like >> and how what did when you say why?
00:22:05
>> Yeah. So he and they explained why. They said look the way the Japanese auto
00:22:10
manufacturers work is the government subsidizes uh the machinery that went to small
00:22:19
manufacturers. So what they did is let's say company A could have a thousand
00:22:25
small companies and they make the cup holder for this particular model, >> right? And and so they have 50 people
00:22:32
who work at this company who make the cup holder >> for and that right for Toyota. But that
00:22:37
the machinery was subsidized by the government >> and so you have thousands tens of
00:22:43
thousands of these companies >> and so they can't pick them up and move
00:22:48
them to America. Let me ask you just a question before you go back to this. Was it surprising to you that not just
00:22:53
Japan, but I'm sure you encountered it everywhere, all these other governments
00:22:57
would be willing to shape and subsidize their own domestic productivity, whereas
00:23:03
Americans were a little bit more on their own. >> It's amazing the subsidies,
00:23:11
the assistance, the it's not a level playing field >> that everybody else does for their own
00:23:18
domestic internal economy, >> but not on every product, >> right? But on many I mean like you know
00:23:24
we set steel and aluminum tariffs. You'd say like why why do you do the whole
00:23:28
steel and aluminum thing? You'd say well if the Chinese give power give the power
00:23:36
to the steel producer free. >> Think of think of steel right it's like
00:23:40
brown dirt. >> Yeah. >> So you process the brown dirt to make it iron ore. But you've all seen it's like
00:23:45
dirt. >> And then you know how much power >> you have to put into that to melt it to
00:23:50
make it look like one of those things we've seen on TV where you're pouring
00:23:53
the iron ore. >> And imagine if I gave you the power >> for free. You'd be making your steel for
00:23:59
250 bucks a metric ton, right? >> And you'd say, "How much does it cost in
00:24:02
America? 700 bucks a metric ton." So they're going to put our guys out of
00:24:06
business, which means they put our guys out of business. And then Japan subsidizes it. Korea subsidizes it. So
00:24:14
maybe they can do it for 400 bucks a metric done. And meanwhile our So we start with 40
00:24:21
steel blast furnaces. Now we have 10. And if we kept going, we were going to have
00:24:27
>> zero. >> Zero. And then what happens is you become basically subservient. If you need
00:24:34
steel, you want to build your own missiles, you have to call another country. Now they may be your allies
00:24:39
like Japan and Korea and you can call them but you are not selfsufficient. So Donald Trump says we need steel, we need
00:24:50
aluminum, we need copper, like and we need to make our own semiconductors. >> Yeah.
00:24:54
>> Right. We need to make our own pharmaceuticals. >> Right. >> Like and once you understand this,
00:25:01
>> right? And and you really think about it. Donald Trump is not only is he
00:25:06
completely correct, it it actually goes to the thank God, right? Like you study pharmaceuticals and you really study
00:25:15
them and you say, "Well, these generic pharmaceuticals are made in India." Say,
00:25:18
"Oh yeah, good. India's our ally." But the ingredients come from China.
00:25:22
>> Exactly. >> So that if you know if there's one nut or bolt that you need and it comes from
00:25:28
China, they don't send it to you. >> Right. >> Right. Like there were these things
00:25:32
called magnets, okay? And magnets go in a car. The value of a magnet that goes in a car is 20 bucks. 20 bucks, right?
00:25:44
You're buying a $30,000 car. It's a $20 part, right? >> But if they don't have it,
00:25:49
>> car. >> Oh, sorry. It can't work. >> Right. >> Right. Where do we get that part from?
00:25:53
Well, China sells them. They buy the dirt, the ingredient for $55 a pound and they sell
00:26:02
you the finished magnet for $55 a pound. So no one's going to make the magnet if
00:26:07
you could sell the raw material for 55 bucks. So they're basically just losing
00:26:12
money and the answer is right. >> Do you think that this mercantalism was it a purposeful strategy to weaken
00:26:19
America or do you think it was just a byproduct of capitalism? The answer is uh yes.
00:26:27
It the Chinese economy is one of overp production. They have 50 mayors provinces and each of those provinces is
00:26:40
trying to succeed. So each of those provinces wants to build an electric car company. And the government puts in all
00:26:47
the money, builds the capital, gives them the power, invest. So if you're the
00:26:51
mayor, you want the winning electric car company cuz remember, China does not have oil and natural gas. So they have
00:26:58
to build electric cuz they have coal, right? So they have to build electric. We don't. We're being fools to think
00:27:06
that we should have batteries and everything that they make that we don't. That's just foolish. But they So that
00:27:13
means if you have 50 mayors and they all have what? One electric car company. Nah, no. They're probably going to have
00:27:19
two just in case. So that's 100 electric car companies and they're all trying to
00:27:23
kill each other subsidized by the government so they can cut their price 30%. Why? Because the government just says,
00:27:31
"Look, let's just try to underell everybody else." And then they make so
00:27:35
many cars. What do they do with all these cars? >> Right? >> So then they dump them and they take the
00:27:40
electric car which cost them 30,000 and they sell it in Europe for 15,000. So you go to an electric car in Europe and
00:27:48
say 15,000 for this car. This is an amazing car for 15,000. That's cuz it cost 30,000.
00:27:55
>> And so what happens is that has the effect of putting Volkswagen out of
00:28:01
business, >> right? >> So what happens is it's it's their model
00:28:07
which is an attack chaos model, but the attack chaos model has over capacity. And then they turn that over capacity
00:28:17
into an asset. Says, "Let's dump the over capacity. We're going to lose a
00:28:21
fortune." Okay, but the government's just paying. We're going to dump that
00:28:24
over capacity into America, right? Or into Europe or into anybody who'll take it, right? We'll put their
00:28:31
industry out of business and then we'll have them over a barrel. will turn our
00:28:37
economic chaos into international prowess >> and leverage, right? >> So that's
00:28:46
>> and so then you're the tariffs now then basically slow that leverage down
00:28:51
because it takes that economic incentive off the table. Do you need to follow up
00:28:54
with some other set of structural changes though to write the ship in the long term? we have to domesticate
00:29:02
production. Like what are the things that we need to do so that in eight years or 12 years if
00:29:09
the tariffs were to change, if a different administration takes a different point of view, what is
00:29:14
structurally going to be left behind that prevents this from happening again? Well, with respect to China,
00:29:21
if we blink, they will sell below cost in America and drive our domestic companies out of business and then we
00:29:32
will be beholden to them. >> Mhm. >> That's sort of a simple math, right? I
00:29:38
mean, if if if you think about it, they spend a fortune convincing everyone that they should be environmentally
00:29:46
friendly and have an EV car. But if if Europe doesn't make batteries and they say have all EV cars by 2030,
00:29:56
then who are they going to buy the batteries from? >> Mhm. >> They have to buy it from China. And now
00:30:03
they need to buy it from China which means what is their foreign policy with respect to China?
00:30:12
>> It's very positive. That's all. Right. They trade economic, >> you know, basically I've gotten
00:30:22
>> prowess over you >> so that you're going to let me do this, that, and the other thing. And
00:30:26
eventually, >> you know, they're not playing with the same rules that we play. And so when you
00:30:33
go around the world and you study the world, like Japan doesn't do cars by the same rules that
00:30:40
we do. So they had to have cars be lower than 25%. 25% was basically a number that choked them. And so we
00:30:52
analyzed together with them that 15% would be the number they could live with, right? and keep making cars and build
00:31:01
more here. And then I said, "Well, but why would we since you're not really
00:31:06
going to open your market? You're not really going to let us have access. Um,
00:31:12
how are we going to do it?" And then I spent months going back and forth with the Japanese
00:31:22
and President Trump with different ideas. How about this? So if you suggested I got it right the first time,
00:31:29
that would not be true. [laughter] I got it right. You know, I've I've always
00:31:33
described my business success in life. I always came at it like this, okay? And then like this, this, like this, like
00:31:40
this rate to success. >> Sooner or later, I got through. So >> what we came up with was
00:31:48
$550 billion. >> That this is not foreign direct investment. This is not Toyota building
00:31:53
a factory in America. This is they literally will finance any project we want to build in America
00:32:03
as long as it's like a good cash flowing project. Nuclear, we want to build a
00:32:08
hundred billion dollars of nuclear plants. They will pay for it. So what happens is they'll borrow the money on
00:32:14
like a 30-year bond in Japan. >> So the Japanese government goes and raises the 550 billion from their
00:32:20
domestic bond holders. >> From their domestic bond holders, >> right? So they're an LP to you and
00:32:24
you're the GP. >> Exactly the right thing. >> They're an LP. They give us the equity.
00:32:29
>> We build the nuclear power plant and then it starts selling power >> and we split the cash 50/50 until they
00:32:38
get back their money plus their interest. So that means in 30 years the taxpayers of Japan broke even and
00:32:50
their dividend was a reduced tariff that every day they had a lower tariff. They
00:32:56
have more employment. They had this and that and you know what their stock market's up
00:33:02
20s. >> Yeah. >> Up. Yeah. >> Not down. >> Yeah. >> Up. So, um, you know, that that's the
00:33:11
point which is it didn't cost their taxpayers money over time, right? Now, we it's pretty simple to understand how
00:33:18
much we're going to make. You'd say, well, if it's 550 billion and their
00:33:22
interest rates are pretty low. So, let's say over 30 years you're going to get
00:33:26
650 billion. When we pay them back 650 billion, if you say to me, how much did America make? I would say 650 billion
00:33:34
cuz we split the money 50/50. >> Yeah. Exactly. And after they get their money back, cuz nuclear power plants
00:33:38
last a long time, >> then the cash flow goes 90 to America >> and 10 to Japan.
00:33:43
>> And when you say to America, is there an account? How does that money then get
00:33:48
spent or allocated or >> the only bank the United States of America has as far as like the secretary
00:33:55
of commerce sees is called Treasury? >> Treasury. >> So we have accounts at Treasury and all
00:34:00
the money goes into Treasury. So all the tariff money goes into Treasury. All this money just goes into treasury. So
00:34:06
it reduces our deficit and it reduces it is it is taxes paid by others >> right
00:34:17
>> for us to get our house in order right that's why the president talks about the
00:34:21
external revenue service right in this case you're going to make you'd say all
00:34:25
right well over over 20 years you probably make 30 billion a year right that's 30 billion a year you know how
00:34:33
much tax we'd have to raise >> Yeah on Americans to cover 30 billion a
00:34:37
year. That's 30 billion a year just on those trades. And then you have the tariffs are 500 billion a year now. And
00:34:45
they will grow over time to a trillion a year. And that money is not money we have to pay in taxes. And eventually
00:34:53
that puts our house in order that lowers interest rates, drives our economy, but
00:34:57
most importantly we don't have to pay. >> President Trump has talked about this.
00:35:02
He said that as you kind of execute the tariff plan and extract this incremental
00:35:08
capital, you could see a ratable reduction in income taxes. Is that the right way to
00:35:13
think about this? >> Or do you think there are other ways to spend the money first that we need to
00:35:17
before we >> Who paid for no tax on tips, no tax on overtime, no tax on social security?
00:35:25
Right. Tariffs. >> Tariffs. >> So that's a like that's a down payment,
00:35:30
>> right? >> Right. But that's the idea. We should be able to reduce the tax burden from the
00:35:36
bottom up. >> Yeah. >> Right. Help Americans who make less than $150,000, who earn overtime, who who own
00:35:44
earn tips. Let's reduce their tax burden, right? Let's help America. And
00:35:49
that's, by the way, that's 85% of America. It's not like it's a subset.
00:35:53
And so I think the president is deeply focused on using the power of his administration
00:36:01
to write a whole bunch of wrongs that have been ripped off about our country and that we are the richest country in
00:36:09
the world. And that means we don't have to take things away from people. Everybody assumes to to balance the
00:36:16
budget. If you asked a politician how you would fix social security, they would say take the retirement age out
00:36:22
>> out. Right. >> Right. Take away. They would never say we are the greatest country on the
00:36:29
earth. We have the greatest economy on the earth. Can't we figure out ways to
00:36:34
enhance our revenues to keep the richest country in the world should be able to give people retirement at 65? We
00:36:41
shouldn't change a darn thing. And that is his thinking. >> Yeah. >> And that's why it's so much more
00:36:48
powerful than any politician before. Politicians think all they have to do is give or take. Give or take. Give or
00:36:54
take. Give or take. >> The way that you've explained this, it makes an enormous amount of sense. It's
00:36:59
like you set the stage of here's the historical imbalance. Here's how we want
00:37:03
to reset it. We want some investment that we're going to get you whole foreign country, but at the end of the
00:37:08
day, this is about American exceptionalism. It's worked in Japan. It's worked in Korea. You did the deal
00:37:15
with Europe. You did the deal with the UK. What's sort of out there that's still
00:37:20
there? I think India is kind of still out there. Although it seems like they are
00:37:25
capitulating a little bit. I saw that they just bought a lot of liqufied petroleum gas from the United States in
00:37:31
November. What are the big sort of hot button places that you want? >> I'll tell you a story about uh India.
00:37:38
So, um, if you remember, so I did the first deal, the UK deal, and we told the UK that they had to get it done by two
00:37:48
Fridays from now. That that was the date that the train was going to leave the station by two Fridays because I have a
00:37:55
lot of other countries doing things and, you know, if someone else is first, they're first. And President Trump does
00:38:01
deals like a staircase. First air gets the best deal. You can't get the best deal after the
00:38:09
first guy went. Everyone says, "I want the UK deal. I want the UK deal." The
00:38:12
answer is >> no. They were first. They took the chance. They moved quickest. They're
00:38:17
first. Second up a stair. >> So that sets the floor, >> right? And then the next one's got to be
00:38:21
higher. And then the next one higher. And then next one higher, the next one higher. So he does things that way
00:38:27
because that way it incents you >> to come to the table. >> Right. >> Right. You could have three countries
00:38:34
who are the second deal. They all get done the same time, >> right? >> But, you know, if you want to wait and
00:38:39
see how it goes, >> it's at your risk. So, he does the UK deal and they had to get it done by
00:38:45
Friday. And Thursday afternoon, Kier Starmer's on the phone, the president, we have they do their deal Wednesday
00:38:53
night and on Thursday, we have a press conference and we announce it. Okay. So, everybody asked the president, who do
00:39:00
you think is next? And if you look back at the time, he said he talks about a variety of countries, but he names India
00:39:08
a couple of times publicly. It's not it's not like a big secret. And we were
00:39:13
talking India and we told India you had three Fridays. >> You put them on a shot clock.
00:39:20
>> Well, they have to get it done because what happens is I have lots of other
00:39:22
countries and when those other countries do their deal, >> the staircase goes up.
00:39:28
>> Right. And >> yeah, >> now the president during all these deals, he would refer to me as the
00:39:35
greatest table setter who ever lived. Okay? Because you've never had anybody
00:39:39
who was as successful as me as a businessman before who's just the table setter [laughter] basically, you know?
00:39:45
So, because what I would do is I would negotiate the contracts and set the whole deal up. But let's be clear, it's
00:39:54
his deal. >> Yeah. >> Okay. He's the closer. he does the deal. So I said, "You got to have Modi. It's
00:40:01
all set up. You have to have Modi call the president." They were uncomfortable doing it. So
00:40:09
Modi didn't call. >> Wow. >> So that Friday left, middle of the next
00:40:14
week, we did Indonesia, the Philippines, right? Vietnam, we announced a whole bunch of deals.
00:40:22
>> Malaysia in that period. >> So we did these whole bunch of deals. So
00:40:25
that's like >> that staircase >> and they were at and because we
00:40:30
negotiated them and assumed India was going to be done before them. I had negotiated them at a higher rate.
00:40:37
[laughter] >> So now the problem is the deals came out at a higher rate, >> right?
00:40:41
>> And then India calls back and says, "Oh, okay. We we're we're ready." I said,
00:40:45
"Ready for what?" You know, it was like 3 weeks later. I go, "Are are you ready
00:40:50
for the train that left the station 3 weeks ago?" So what happened is they just you know
00:40:56
there sometimes there's that seessaw and people on just the wrong side of the
00:41:00
seesaw you know when I was a when I was a young uh when I was young in business and I was a
00:41:07
trader one of my first jobs was a trader and when I would start on the wrong side
00:41:12
of the seesaw you know I'd buy and it would go down and then I'd sell it would
00:41:16
go up another buy it would go down and sell like when you're on the right side
00:41:19
of the seesaw you can't lose you know you buy it goes up and and you sell it
00:41:23
and it goes down and you buy it goes up and it sell it goes down and you feel like you're the king. But when you're on
00:41:27
the wrong side of the seessaw, >> what I used to do is I used to put the phone down.
00:41:32
>> I used to go in the bathroom, fill a bucket with water, take a rag, and I
00:41:37
would wash the plants in the office cuz it was much cheaper than me picking up the [laughter] phone.
00:41:43
So, and then and then people would call and say, you know, can I speak to Harry?
00:41:47
They go, no, he's in a meeting. And meanwhile they'd look up and there I am
00:41:49
washing the plant because whatever I did I would get back in there and I'd touch
00:41:53
it and it would go the wrong way. So what happened is India just was you know on the wrong side of the seessaw and it
00:42:00
wasn't it was just they couldn't get it done when they needed to and then they
00:42:04
couldn't get it done and then they couldn't get it done and then they couldn't get it done and so what happens
00:42:07
is all these other countries kept doing deals and they're just further in the back of
00:42:15
the line and now when they say but but what I want is I want the deal in between
00:42:22
the UK and Vietnam Um because that's what I negotiate, >> right? >> And they and they remember and I
00:42:30
remember >> and they say but but you agreed and I said then >> then >> not now
00:42:40
then. And so that's that's the problem. India will work it out. But it's just,
00:42:49
you know, there's a lot of countries and and they each have their own deep internal politics.
00:42:55
>> Mhm. >> And to get something approved by their parliament or their diet or their, you
00:43:01
know, these are deeply complex things and and we're dealing uh with the world,
00:43:07
but we've gotten them done. You know, we got Europe done, right? We did Japan,
00:43:13
then I did Europe, then we did Korea, and and we've done country after country
00:43:18
after country. And uh and these are durable, meaning these are deals that take care of the countries,
00:43:29
autos, pharmaceuticals, semiconductors, you know, things that really matter. And the tariffs have been incredibly
00:43:39
effective. And you can use them to change the trade deficit. >> Sure. >> But you can also use them to change
00:43:47
behavior. And we should spend some time talking about drugs. And >> this is what I wanted to do. Let's
00:43:51
double click into AI and drugs, but let's start with drugs. So you were pretty integrally involved in some of
00:43:56
the >> the pharmaceutical repricing and manufacturing deals. Just walk us through what the goal of those were and
00:44:04
and how Americans will feel the impact of the deals that you've been able to
00:44:07
get done. So everybody who studies pharmaceuticals um learns that America is the client, is
00:44:21
the consumer, is the payer >> worldwide. >> Worldwide we pay all the money. So these
00:44:27
drug companies make 75% of their revenues in America and it's 100% of their profits because what happens is we
00:44:34
pay let's say $1,000 for a drug and then Europe says, "Yeah, we have socialized
00:44:41
medicine. We're not we're not buying it unless what's your cost?" And the drug
00:44:45
company says 100 bucks. So they say we'll pay you $175. You can make 75 bucks. And then the drug
00:44:54
company says no. And then Europe says, "Okay, I'm not buying it then." You'd
00:45:00
say, "What do you mean you're not buying? You're not going to give medicine to your people?" They go, "No,
00:45:04
we can't afford it." No. So eventually the drug company says, "Ah, fine." So
00:45:08
we're paying a,000 and they're paying 175 bucks. You know, six times less. And you'd be
00:45:17
like, "What?" And that is how the whole world's drug model was working. We're paying a,000.
00:45:26
Everyone else in the world is paying 175 bucks. So Donald Trump says I want to fix it and I want MFN price. You want to
00:45:36
charge us >> most favored nations. >> Most favorite nations. So >> we're the cheapest price in the world.
00:45:41
>> Right. But you could charge them 500 and then you could charge us 500. Fine.
00:45:46
>> Right. >> But if you're willing to sell it to them for 175 bucks, don't come here and tell
00:45:52
me that I have to pay a thousand. All right. >> It's just unfair. [laughter]
00:45:55
>> You're not dictating price in America. You're essentially dictating the lower
00:45:59
bound price abroad. >> We are dictating fairness. >> Fairness. >> Like if we're your biggest customer,
00:46:06
treat us like fairly. We're not even saying treat us the best. We're saying
00:46:11
treat us fairly. I mean, it's amazing. So he writes a letter to 17 giant pharmaceutical companies said, "I
00:46:20
want MFN." And I got to tell you, I don't know a single person in this administration who thought he could do
00:46:27
it. It was so audacious, so bold, so powerful. I was like, jeez. I mean, you know, you just write a letter to all the
00:46:35
big drug companies saying, "You're going to give us MFN." And you like write a
00:46:39
stern letter. And I'm like, >> okay, >> good luck with that. >> How's this baby going to work? Right?
00:46:44
you know, and then so I sit with uh we have this amazing meeting with Bobby Kennedy and uh
00:46:53
and his team and we say, "Look, I've got these 232 tariffs. I could smash these companies. Smash
00:47:01
them because they all make it overseas and then exported to us and we're and
00:47:05
we're all the money. So we could charge them any tariff we want. We charge them
00:47:08
500%. So, let's do something that's never been done before. Let's literally be a team,
00:47:17
okay? You lead. So, Bobby and his team who were amazing, Dr. Oz, Chris Club, I mean, these guys did spectacular job.
00:47:27
>> They led, but I was the hammer, right? >> From table setter to hammer
00:47:33
>> to hammer. So, now I'm the hammer. >> Okay. >> Right. So I'm like in the background
00:47:36
like hammer and then like say look you have two things we want from you. We want your best drugs at MFN prices. You
00:47:48
can't sell it to anybody in the world at a better price you sell to us of of the
00:47:52
countries that have money. >> Right. >> Right. We're not talking about if you
00:47:55
sell it to subsahara Africa. We're talking about, you know, the the the big countries, the OECD, you know, let's say
00:48:00
call it the big 10 or the big 20. Charge us the same and reshore and I'll wave your tariff while you're
00:48:13
reshoring provided you do those two or hammer. Just hammer. And what's a hammer mean? I
00:48:21
don't know. Hundreds of percent tariff starting I don't What do you think 30
00:48:26
days from now? Like just bang. So, >> so you were just there in the corner.
00:48:30
[laughter] They just see just >> I'm like the handsome guy in the back
00:48:34
just going to you know like so if you see me at the meetings I'm like there like but if you look at the uh pictures
00:48:44
that are put out everybody puts out the picture of Bobby signing and me signing.
00:48:48
>> Right. >> Right. You say what are you signing Harry? I'm signing the no hammer rule.
00:48:53
[laughter] So the result is OMIC and Munjaro are on Medicaid and Medicare for $149
00:49:08
instead of not on it, >> right? >> And generally for sale for thousands,
00:49:15
>> right? >> So think about it. Instead of generally for sale for thousands, everyone in
00:49:19
America can have it for 149 bucks. and and that's going to reduce all I mean
00:49:26
it's going to change these drugs. We had we [clears throat] had drug companies
00:49:30
say you know what >> I'm just going to give it to you. One of the drug companies Merc said they're
00:49:36
going to just give us their number one drug in the world. Right. >> They're going to give it to Medicaid
00:49:40
Medicare for zero. >> Right. >> Right. So we saved 25 35 billion dollars
00:49:47
a year. But more importantly, we made drugs accessible to America at a fair price and stop
00:49:56
always being the one who pays. We are the richest country in the world and the world viewed us. remember when I
00:50:05
was growing up, uh, there were all these cartoons on TV and there was always this
00:50:10
one where there was a guy stuck on a desert island and he looks at the other guy and as the other guy walks by, he
00:50:17
starts looking at him. He looks like a a big chicken leg, you know, he's like
00:50:20
starving. So, he looks at the other guy, he sees him like I mean, the world views
00:50:25
us as a giant chicken leg, >> you know, that they should just we're so
00:50:31
rich we won't miss it. And so they all the trade deals were bad, the drug deals
00:50:37
were bad, the you know you can go chapter and verse the immigration system is the most ridiculous thing. Imagine we
00:50:49
are the richest most successful country in the world and we give a lottery. A lottery.
00:50:57
So let's say we have a lottery to come into America. If you win the lottery,
00:51:02
you win, >> right? >> But who's paying for the lottery? >> We are. So, it's not like, you know, the
00:51:09
normal lottery, everybody pays in a dollar and the winner gets x% of the money, >> right?
00:51:14
>> Here, the people win the lottery and we lose, >> right? >> Like it's it's like a win-lose and
00:51:21
that's like and you would say, gosh, why would we do that? >> Yeah. And it's only because Donald Trump
00:51:29
is willing to literally challenge why are we doing this? Why are we doing that? Why are we doing this? Why are we
00:51:37
doing that? He has incredibly capable people around him who are willing to challenge it and then come up with a
00:51:44
better answer, attack that better answer and deliver the outcome. Meaning just talking about it, as I said in the
00:51:50
beginning, doesn't count. Yeah, >> you either change the immigration system, you change the price of drugs,
00:51:57
you change the trade deficit which have which is awesome, right? You change the budget deficit of the country down $600
00:52:06
billion dollar this year. You just you just relentlessly deliver. What happens is if you have a
00:52:13
businessman in that office and and Donald Trump has the best intuition of anybody I've ever met. I could tell you
00:52:22
stories and stories of just like one day he said to me u I don't know maybe we
00:52:26
talked about it last time. What's the what's the flag on the back of those
00:52:29
ships? And I was like I don't know. He goes you ever seen a flag on the back of a ship
00:52:35
that you know where it was from? I was like no. He goes why is that? And then you look it up and the number one flag
00:52:43
on the back of a ship is Liberia. All these ships, like all the tankers, >> all the tankers, cargo ships. And why is
00:52:52
that? >> It's a tax scam. It's a flag of convenience, >> right?
00:52:57
>> And then what they do is they then so they make all their money on the seas
00:53:02
and they charge the port is an expense, right? So they pick it up from Europe. It's an expense. They drop it off in
00:53:09
America. That's an expense. And all their profits are on the high seas where
00:53:12
they pay no tax. Right. So what do you think they do? Then they buy the ports. >> Right.
00:53:17
>> Right. It's all a tax scam. So the president by intuition sends us out like he sends me out. He
00:53:26
loves to send me out stuff because, you know, I I just love the stuff and I find
00:53:29
it. And uh and we're going to attack it. The next year you're going to see this
00:53:37
government attack fraud. And the fraud is probably a trillion dollars a year of people who just have
00:53:47
figured out how to rip off the system. And the system, remember, America had open
00:53:54
borders till 1914. The reason it had open borders in 1914 is because it gave you nothing,
00:54:01
>> right? So like if you were sick, you couldn't go to the hospital unless you
00:54:05
could pay the bill, >> right? >> So if you were sick, you you die. What
00:54:08
do you want from me, right? Get a job, take care of yourself, or get lost, >> right?
00:54:13
>> And when we went to have a welfare state, you have to close the borders
00:54:20
because if the people are going to give their money, they need to give it to each other. You can't really open the
00:54:27
border and say, "I'm going to give my money to anybody who wants to come in."
00:54:30
Right? that's getting it wrong. So when people say open immigration is how we
00:54:37
built America, they are right. And open immigration would be something interesting if we
00:54:44
gave people nothing. Cuz if we gave them nothing, if they weren't smart enough,
00:54:50
capable, uh, entrepreneurial enough, driven enough, >> Mhm. >> they would starve to death. And so they
00:54:56
wouldn't stay here. They would self-deport. >> Right. But if you're going to give them
00:55:01
welfare and you're going to give them food stamps and you're going to give
00:55:04
them housing and you're going to give them this that, then everybody's going
00:55:07
to come and just leech off of us and we're going to pay and pay and pay until
00:55:15
now in the on this immigration side, you've launched two versions of the Trump card, I think, right? There's the
00:55:22
million dollar Trump card and then the $5 million card. Where are those programs and how have they been working
00:55:28
so far? So there it's out right now, trumpcard.gov. It's a really nice website. And what
00:55:35
happens is the idea is to stop letting people into the country without a clear benefit to the country. Right. You
00:55:47
should come in if you're going to give us a clear benefit to the country. Like
00:55:50
it should be black and white. >> Not you. Yeah. >> Right. You're going to help us.
00:55:53
>> Yeah. So the average green card, if you looked for the last 5 years, the average
00:55:58
American makes in the $60,000 a year and the average green card recipient made in the 40s.
00:56:06
So we are bringing in the bottom cortile, >> right? >> Like what? Why? We're the only country
00:56:12
in the world who was bringing in the bottom. more likely to be on welfare, more likely to be on uh uh food stamps,
00:56:20
more likely to, you know, on sub, you know, getting stuff from the government because they were all coming to get
00:56:27
stuff from the government, >> right? >> And so the idea for us is, okay, here's
00:56:32
the gold card. you want to come in, prove to us you're going to make a benefit to this country, give the United
00:56:39
States a million dollars, which pays off our deficit, reduces taxes we have to charge Americans, and
00:56:46
then you come in, you've proven that you're going to be a good citizen. We
00:56:51
have to vet you. We spend 15,000 on the greatest vet we've ever done. And then
00:56:55
you come in and you're going to be top Cortile, maybe top Desa, >> right? But you're going to help America
00:57:02
be better. >> Have you announced how many people have applied or the first batches yet that
00:57:06
have been granted this? Not yet. >> No, the president the president the first week uh put out that we had sold
00:57:12
uh a billion dollars worth >> in the first week. >> Yeah. >> Oh, wow.
00:57:15
>> So, but that's a but there's a process and that this process is going along
00:57:24
fixing the immigration system, right? Not letting people come in by lottery, selecting who they are, not bringing in
00:57:33
people who would take a trainee job, right? People who graduate universities around the world and people who graduate
00:57:41
>> Yeah. I mean, look, I think H-1B is fantastic for someone who makes $500,000
00:57:47
who's a cool engineer, >> but it's not okay if it's a $60,000 college graduate.
00:57:54
>> Hire from the universities of America. don't hire from the universities of the
00:57:58
world. It just doesn't make sense. And what happens is people steal the history
00:58:04
of America and they lie, change the peace shape and try to stick in it by saying, you know,
00:58:12
America was born with, you know, immigration and open. Yes, that's when we gave nothing. But if you're going to
00:58:20
give everybody the gift of America, we better get something back. And that's
00:58:25
why you're hearing about all this fraud. These people came in in order to defraud
00:58:30
America. It's not it's not like a random act, >> right? >> They figured this is the richest country
00:58:36
in the world. We live in a crap hole. Let's get out of here and these morons
00:58:42
are going to let us have a BMW, >> right? >> And we're not going to be hardworking
00:58:46
industrious people. We're just going to figure out the model and screw them. And
00:58:51
America was not designed with walls and barriers. We were designed with an entrepreneurial spirit
00:59:00
>> to make the world shine. >> You know, that's who we are. We are, you
00:59:04
know, when I when I give talks, I say if you want to understand the greatness of America,
00:59:13
close your eyes and imagine a world without America. It's dark. >> Yeah.
00:59:18
>> Really dark. Now open your eyes and say, "What makes the world shine when America
00:59:26
is shining the brightest?" So you'd say, "Well, if that's true, America reset the
00:59:32
world order of trade, right? And properly set the balance where since we're the best economy, we're in the
00:59:39
best position." And so if you're right, Howard, and the world shines brighter,
00:59:44
when America shines brighter, then even though the world's paying America, they should be in better shape.
00:59:52
>> Yeah. >> Korean stock market up 70%. Japan up like 20s or 30s. Europe up more
01:00:01
than 15, right? All of these up. And you'd say, "Well, I don't understand. How could they pay us and be
01:00:08
up?" Because cuz the world and and you know stocks are a long-term outcome.
01:00:15
>> That's right. >> Right. And the long-term outcome is if the United States is powerful and strong
01:00:20
and creating the greatest weapons in the world and selling us the greatest weapons in the world and protecting us
01:00:25
and defending us and building an economy that we can rely upon and trust upon, our companies are going to do great.
01:00:31
>> Yeah. >> They're going to do great. >> This is an excellent point that no one
01:00:34
has actually made. the narrative that the media has been trying to paint recently is this is a debasement problem
01:00:39
for the US dollar. But I actually think what you said is more accurate, which is
01:00:43
what people looked through were the tariffs and saw a level of economic resilience in these other markets that
01:00:48
made them very attractive in a way that they weren't attractive at the current
01:00:52
course in speed. That's why Korea did so well, Japan did so well, Europe did so
01:00:56
well. It's why a lot of these base commodities did well because now you're
01:00:59
seeing an increasing of demand because you're going to see production capacity
01:01:03
all over the country. It was a huge change actually. It really resets how capitalism and capital markets will
01:01:09
work. I don't know if it was an intended unintended consequence, but it's a very
01:01:11
positive consequence. I want to talk though about what you just said about 2026. You said we will be surprised at
01:01:18
the level of focus that you and the president put on fraud and you think there's a trillion
01:01:25
dollars. Can you just double click into what that means, how you're going to go
01:01:29
after it, and is it at the federal level, at the state level, just kind of give us the rough
01:01:36
game plan, what you can say. >> Sure. So, the president is the federal, >> right? So, if if the federal government
01:01:43
gives money to the state and the state gives it out, then we have a dog in the hunt,
01:01:50
>> right? >> Okay. If it's their money and they're giving it out, we don't really have a
01:01:53
dog in the hunt. But we have a dog in almost every hunt because [laughter] they take the federal money, it goes in,
01:01:59
you know, and then they administer welfare. But it comes from it comes from us. So this is
01:02:05
>> the success we had in pharmaceuticals was the commerce department and HHS
01:02:13
working together in a way that these departments have never worked together before. that he understood my power and
01:02:21
I understood his power and together we changed the outcome to incredible success. So that's how we're going to
01:02:30
look at it. We're going to have a multiple departments working together, right? No one has ever looked
01:02:40
at if you're getting Medicaid and Medicare, how much money do you make? No one's ever compared the two.
01:02:49
>> Really? >> Yeah. >> Yeah. You're supposed to tell us, >> but if you're a pro,
01:02:55
>> it's the honor system. >> Yeah. But the world of America is built.
01:03:01
But now with modern technology, >> right? >> And then you have a beast like me.
01:03:06
>> Right. >> Right. The hammer >> and and and probably the guy with the best intuition
01:03:11
in the world sitting right over there who's also a businessman. >> Right. and you know we'd say okay we're
01:03:18
going to build the technology to do this we are going to build it and everybody's
01:03:24
on board so you have the ths you have HHS you have commerce right we're all working together and we are going to
01:03:34
come out with models and methods to seek the fraud out and not on a limited to Minnesota scale oh No, we're going to go
01:03:46
after it big time, right? And you have so you have that on one side and then you have the execution
01:03:55
of the first year in the second year, which means you have the president saying we have $18 trillion of committed
01:04:01
capital. Okay, open your plant. We have spreadsheets. I went over them yesterday, right?
01:04:08
>> We have spreadsheets of promises, >> right? All these people who made these
01:04:12
promises, okay, call them. 30 construction projects launched that would never have been launched. So
01:04:23
here's my view. >> I told you that I thought in the end of this year we would get to 4% GDP growth.
01:04:32
I said it in the first quarter. Yeah. >> And 4.3. Now the fourth quarter is going
01:04:37
to be uh a mess because of the shutdown. Seriously, this is accounting in America. If someone works for the
01:04:44
government, they count them as GDP. And you would say right that face exactly make you go what? So, so let's
01:04:54
get Wait, stop, stop, stop. So you hire someone in your department, GDP just went up even though they don't do
01:05:00
anything. I thought GDP would be like if you make a something >> like you do something. Nope.
01:05:07
>> So, here's the fun part. When you furlow them uh on the shutdown, right? You're still
01:05:16
paying them. That's the deficit. But they're not actually working at the
01:05:21
government, so they're not productive. So, they take it away from GDP. And you'd say, "This is actually like the
01:05:28
silliest thing in the world. You're giving the guy the same amount of money.
01:05:30
What's the difference? But these are the rules. So our fourth quarter GDP will be
01:05:36
a point and a half lower than it otherwise would be for this oddity. >> Just the furlow. That's basically so
01:05:44
like like the common economists think the fourth quarter growth is going to be a point. Okay. They're just like wrong.
01:05:52
I said they were wrong in the third quarter. I said they were wrong in the second quarter. We have a 3.8 and then
01:05:57
4.3. We'll probably be like 2 and 1/2. But that would have been to your point
01:06:01
four >> four >> right >> next year with all this construction in
01:06:04
the ground like this Friday I'm flying up to New York to a uh two microns groundbreaking of their tens of billions
01:06:12
of dollar factory in upstate New York that's just another example right then
01:06:18
I'm going to Detroit where they're doing a huge you know new build uh new new
01:06:23
auto plant and they're building their engine plant and it's just fives. You're going to see fives fives
01:06:32
in the greatest economy in the world. You're going to see fives. And people think you can't you can't
01:06:42
>> 5% GDP on a base this big is just it's enormous. >> We have a $30 trillion. So 5% is 1.5
01:06:48
trillion in growth. And if we cut rates, you'll see sixes. And people do not would never before
01:06:59
Donald Trump walked into that office they would don't think that's possible.
01:07:02
And what's six mean? >> Let's just put six in context. Six was China at its peak under central planning
01:07:10
with a tight control on every aspect of its economy. That was what the world knew is what six looked like in the
01:07:17
modern era. And now the alternative version of six will be the president, you, the team in a much more open way.
01:07:25
I'll be shocked. >> You would have said it could never happen. >> I would be shocked. I mean, that's an
01:07:28
incredible >> Okay, you're gonna put it this way. You know, it wouldn't even be fun for you
01:07:32
when we see the fives. >> Yeah, >> because they'll be so soon. They could
01:07:35
be this quarter as in the first quarter. So then I'd say, "Well, you have to come
01:07:38
back and see me when it's five." But then you'll come back in a couple of
01:07:41
months. And then you'd say, "Howard, I just spoke to you for an hour. I don't,
01:07:44
you know, I don't need to speak to you again." But you're going to see fives
01:07:46
like as in early in 26. >> That's incredible. >> And then if they cut rates, and that's
01:07:52
the thing. I need a new Fed chair who cuts rates. And if they cut rates, >> sixes.
01:07:58
>> You'll see sixes. And what you're going to see, what that means is jobs are
01:08:03
abundant. >> Yeah. >> Good jobs are abundant. Highpaying jobs are abundant, right? Construction jobs,
01:08:08
you just get paid more money to be who you are. You make more money. And that is not inflation. That is called 6% GDP
01:08:20
growth. See, if if we have no growth and I pay you more because you demand more,
01:08:25
that's inflation. It's right. But if I'm like trying to build a factory cuz I'm
01:08:30
kicking tail and and I have to share some of my profits with you to convince you to come to work.
01:08:35
>> Well, I'll give you a perfect example of this. I am the lead investor in a one
01:08:39
gigawatt data center project in Arizona. We have to pay electricians between $500
01:08:45
and $750,000 a year, which is more than what we pay the engineers that work at the models
01:08:53
out of Facebook. But it's an example to your point of just the economy has created earnings potential across the
01:08:59
board in ways that I've never seen in my career. It's really quite incredible.
01:09:03
>> The society under Obama, the Obama view of the country, he blew it, right? He got rid of shop class.
01:09:14
When I when I grew up, you you know took shop class. Totally. >> There were things to use with your
01:09:19
hands. >> Yeah. >> And then we sort of ruled that out in America. >> Said you got to go to a liberal arts
01:09:25
college. >> You have to end up with $200,000 in debt, >> right? And then these people thought
01:09:31
like, what job am I getting that gets me to pay off my $200,000 in debt? it, you
01:09:36
know, and then you you have Biden jams in inflation, so the price of a house goes up, and then the American dream
01:09:43
sort of slips further and further away. >> Yeah. >> And you get Donald Trump saying, "Okay,
01:09:48
the way to fix it is, I need to get the people working with their hands, 6 million Americans sitting on the
01:09:55
sidelines because the jobs are not the right jobs for them. Get them out. Technicians, fix robotics."
01:10:03
>> Yeah. >> Right. I had I went out to Arizona to the TSMC plant and I met the uh these
01:10:09
guys were pipe fitters. I met a pipe fitter and I said, "So, how's your job?"
01:10:14
He goes, "I play Tetris every day." He goes, "I've got to get these kind of
01:10:19
pipes through this kind of thing and this kind of way. I got they give me this much space and I got to do all this
01:10:24
thing." He goes, "I have the greatest job ever." >> Can I tell you something about that TSMC
01:10:29
plant? That's a 4 nanometer plant. They are at better yields or equivalent yields than the best operating for
01:10:36
nanometer plant in the world which is in China. Isn't that incredible? American
01:10:39
technicians are now dollar for dollar as good as what was happening in China. It's incredible.
01:10:45
>> Nobody knows this by the way, but it's incredible. >> So TSMC when I when I walked in there
01:10:50
was this chips act. >> Mhm. >> Okay. So the chips act had $52 billion
01:10:57
because we made no chips in America. Semiconductors. >> Yeah. By by the way, so so just as a
01:11:02
sort of a fun story, a wafer, these are things, you know, but a wafer is the size of a like a pizza you get in a
01:11:10
restaurant. >> Yeah. >> It's like a personal pizza. Small pizza.
01:11:12
Yeah. Exactly. >> Yeah. It's like a 12-in pizza. Okay. And then what they do is they break it
01:11:17
>> in little chips. >> Yeah. >> And that's why it's called the
01:11:19
semiconductor chip. They literally like chip it. >> Yeah. >> Right. So, the beauty of AI, like these
01:11:26
GPUs that Jensen builds from Nvidia, is instead of making 4,000 little chips out
01:11:33
of that pizza, they make 10. These are big things. Like this thing's the size of a refrigerator, like you
01:11:40
think of a chip, think of the little teeny thing going in your iPhone, right? And these things are the size of a
01:11:45
refrigerator, right? And um so it's it's a different kind of model, but you know they had they they gave Intel
01:11:55
$10 billion gave G. >> Yeah. Actually, let me just stop there because I think one of the things that
01:12:00
you did, you basically just put a pause on the chips act and ripped it apart and
01:12:05
restarted it effectively >> because it was initially under Biden again just as an outsider looking at it.
01:12:12
It was largely giveaways >> and I think you flipped it around and you essentially said stop. My
01:12:17
understanding is you actually haven't you've committed to a lot but you've
01:12:21
been pretty judicious and disciplined about giving the money out. I think only 6 billion has gone out because there's a
01:12:27
bunch of conditions and you have to actually meet these milestones and the chips act is is very different than how
01:12:32
it started. >> So is that fair? >> Yeah. cuz the Biden administration
01:12:37
viewed the $50 billion as I'll give you 10%. You build a $16 billion plant, I'll give
01:12:44
you $6 billion. And uh >> and why does that not work? Like why why would that not have worked or why was
01:12:50
that not working when you came in? >> Why would you give $6 billion to TSMC,
01:12:57
which is Taiwan Semiconductor Manufacturing Corporation, when their stock is worth a trillion,
01:13:03
>> right? So what Donald Trump does is says, "Hey, hey, how about this? How about this?
01:13:09
I'll charge you a 100% tariff. How about that?" And then the guy says, "Okay,
01:13:13
I'll build an America." See, I don't have to give you six billion. Like, you
01:13:16
know, Donald Trump can dissect it. >> Yeah. >> Right. In a paragraph.
01:13:20
>> Yeah. >> In a paragraph. >> Right. >> So, what we did is we we said to TSMC,
01:13:26
"Look, you signed the contract. There's 20 pages of DEI stuff in it. You need to
01:13:32
hire a blind. Oh, you have to hire a blind contractor. You have to have like uh you know trans lesbian engineers. I'm
01:13:42
not kidding by the way. And you know, so think about the Taiwan Semiconductor Manufacturing Corporation, right? How
01:13:48
many lithography engineers does Taiwan have that are female, let alone what their sexuality
01:13:57
choices are? >> Right? >> They've never had a female. They're all
01:14:00
men. Right. >> So I said, "Listen, you're in breach, >> right? Everybody thinks like a
01:14:05
Republican will just rip that stuff up." Not this kind of Republican. This kind
01:14:08
of Republican reads the contract and says, "You know, you >> you're in the DEI.
01:14:13
>> You didn't build a daycare center in the middle of your clean room fab."
01:14:19
Like, you signed that contract. So you're in breach. Okay. So how about this? How about I add 100 billion?
01:14:26
So instead of building 60 billion, you build 160 billion, >> right? >> And we agreed. So I feel better.
01:14:35
>> And then do you wave the DEI requirements? Yeah. >> Hey, build another hundred billion. We
01:14:39
can rip that stuff up. No problem. So what happens is you now have a $165 billion plant going in. And I think I'm
01:14:48
going to let TSC TSMC announce it, but they are going to get much bigger even from the 165 billion. The And this is
01:14:57
remember this is a factory. >> Yeah. >> That makes the stuff that Nvidia sells
01:15:03
for five times higher. >> Okay, let's talk about Nvidia for a second. You did a deal at the end of
01:15:07
this year. I don't think we've ever seen a deal like this. And you can tell me if
01:15:10
it's wrong, >> but you control the export licenses and as you said, Jamath, we don't want to
01:15:17
our adversaries to get the most advanced silicon which makes sense and then you struck an agreement with
01:15:23
Jensen where now I think it's the H200s >> which are not quite the most advanced
01:15:28
chips but maybe one generation before can go to China >> advanced at what China makes
01:15:33
>> right but in return you got a 25% marketing fee what do you kind of rev
01:15:40
share >> tariff >> tariff just describe to us the construction of that deal and what it
01:15:47
means for these kinds of deals in the future. >> So Jensen Wang who runs Nvidia is you
01:15:55
obviously a businessman of extraordinary capacity. You can't run a $5 trillion
01:16:00
company unless you're like >> incredibly impressive. >> Impressive. So he comes in and and I
01:16:06
promised him in the beginning when I first met him that I would help him have really easy access to the president
01:16:15
because he's a national treasure. >> Yeah. >> Right. And and our great companies are
01:16:20
national treasures for America. So, so he his argument to the president, you could buy it or not, is that if you shut
01:16:29
off China entirely, then all of their n all of their economics go to their national champion
01:16:38
to build new stuff and all their economics go to that company and that helps that company grow. And that if you
01:16:46
give them better than what they have, you don't have to give them your best.
01:16:51
You just have to give them better than what they have. >> Mhm. >> Right. This is his argument. Then
01:16:56
they'll give less to their champion, >> right? >> And more to you and and it it'll have a
01:17:04
positive economic relationship with China and positive for us overall. Now, there are plenty of people who disagree,
01:17:15
right? But that was Jensen's argument and that was the discussion, the argument, the debate that we had. And
01:17:25
then when that was done and over, then the president said, "And you got to give me 25%." So the 25% was
01:17:34
a throwaway, >> right? >> But it was like, "Look, if I'm doing all
01:17:37
this for you, you still got to give me 25%." So the way we're doing it is he
01:17:42
has to send the chips to America. We test the chip to make sure that he hasn't enhanced it in any way.
01:17:50
>> Okay? >> Cuz the H20 was oddly enhanced. You know that it had it had less flops but more
01:17:57
>> memory. In fact, it had more memory than the H100 which one could argue was a
01:18:02
little you know not everybody knew that. Say it that way. So we test it on the way in. We can charge it a tariff
01:18:11
just regular [snorts] 25% tariff and then we give export licenses to who he wants
01:18:16
>> and then he sends it to China and then >> and he sends it to China or he sends it
01:18:19
to you know whoever he's selling it to. So I think we the president this is the president's deal and and my
01:18:29
job is to make sure all the smart people are in the room with with both opinions.
01:18:36
>> Okay? >> Never let one opinion you people think oh the last person who met Donald Trump.
01:18:41
No they don't. Donald Trump hears so many different views that often he'll
01:18:48
call the person he likes that he's going to go with the last one before he gives
01:18:53
it cuz that makes sense. Like if I'm going to say yes to you. Yeah. >> Right. I'm saying no to him but I'm
01:18:58
saying yes to you. So what a shock. I call him and say no and then I call you and say yes and [laughter] they'd say,
01:19:02
"Oh, he called Shamath last and that's why you stop." >> Yeah. Yeah.
01:19:06
>> So that was, you know, Jensen did a great job making the case and convincing
01:19:14
the president of United States who has a very very detailed and nuanced view about China and not everybody agrees
01:19:22
with him. >> Right. But you know my take on having worked closely been his friend for 30
01:19:28
years but been worked closely with him this year is he does have the best intuition of
01:19:34
anybody I've ever met in the whole wide world and when he thinks it's okay and
01:19:40
and I know he's had full information right and he makes he makes really >> when you make strong decisions you might
01:19:52
disagree Yeah. >> Doesn't always agree with me. >> Yeah. >> But it's a strong
01:19:57
decision which has deep base thought and balance to it. And he's done that, you
01:20:04
know, every time. And it's it's amazing. He he does play a better game of chess. He
01:20:13
just does play a better game of chess. And that's why it's so fun for me
01:20:15
because, you know, I I was very successful in business and and in my companies which had I 13,000 employees
01:20:24
like I was the one up here. >> Yeah. >> And for me to work for somebody
01:20:29
>> the bar is high. It >> the bar had better be high. And he's he's just the most fun to work for.
01:20:33
>> Do you think that the deals that we're seeing so there's a 25% revure on the
01:20:37
H200's from Nvidia. You were able to get I think 10% of Intel. >> 10% >> 10% of Intel. There there's a lot of
01:20:44
these deals where you could say all these companies that are on the bleeding edge of America, America's national
01:20:49
treasures, they need help that only you or the president, the infrastructure of America can provide.
01:20:57
Should America get something in return? >> I think the way President Trump thinks
01:21:02
about it is that if you can do it on your own, you do it on your own. But if you really need his
01:21:12
help and you need him to open the door, to drive the door, to change it, you need America to make it happen for you,
01:21:21
isn't there something for the American taxpayer there? >> Right. >> Right. Because if in the end, if we can
01:21:28
balance the budget, then then he can take care of the people who make less than $150,000 a year and
01:21:35
change America. And that's what he wants to do. So he's looking for look why
01:21:41
would we give the money to Intel? It it was given to Intel contract signed given
01:21:47
to Intel. So to turn that around to where America owns 10% of Intel, right? That can fix use that money to fix
01:21:57
social security. Use that money to reduce our deficit. Use that money to charge less in taxes. Use the money to
01:22:04
make America great. Right. And you know, look, I I think if we get rid of the fraud,
01:22:13
that'll save the country a trillion dollars. >> Right? >> If you figure out ways to make a
01:22:18
trillion dollars, you could reduce our deficit or you could start the process of solving social security.
01:22:28
Not like the scary part for me is if I say the word social security, it it doesn't matter what you say with the
01:22:35
word social security, they assume you're taking something away from them because
01:22:38
every politician who's ever said social security says I'm going to take something away.
01:22:42
>> Yeah. >> But the answer is if you hit it with outside money and just start hitting it with money that
01:22:50
you've made out here [sighs and gasps] and you fix it, you take nothing away,
01:22:56
>> right? And that's it. If we're the richest country in the world, if we get
01:23:01
rid of the fraud and we can run America smart, we can do it all because we're the
01:23:09
greatest country in the world. Imagine if you grow 6%. You're going to fix the
01:23:13
deficit. You're going to fix taxes. You're going to fix mathematical. No,
01:23:16
it's mathematical. You start to do it. You get full employment. You people get
01:23:20
paid. It's >> I think we can win. And uh and that's why I I can achieve the goal of being
01:23:29
the secretary who has the most fun because I'm in the room where it happens, right, with Donald Trump where
01:23:35
he thinks about things and he thinks about them. And I was in a meeting yesterday with him where there were like
01:23:41
eight advisors sitting around the, you know, the resolute desk and he's on that
01:23:45
side and they all had this opinion and he had it and he said, "No, no, that'll
01:23:52
have this derivative result and we're not doing that." And everybody in the room was like,
01:23:59
"He's right." I mean, you got eight guys [laughter] saying like, you know, guys
01:24:03
and women thinking, you know, and he just says it. I mean, he's he's he's
01:24:09
great. Great. >> I have a one final question, which is an audience question. It's from Brandon L
01:24:15
from New York, who asks, "Who is your favorite child?" [laughter] >> So, I have four kids. Okay. So, the the
01:24:25
joke in my house was I had the oldest, it's my son Kyle. I had the youngest, my
01:24:32
son Ryan. I have my only daughter who's my daughter Casey. So my son Brandon uh
01:24:39
would sign his birthday card, your fourth favorite. Cuz he was neither the youngest nor the oldest nor the
01:24:46
daughter. So he would sign your fourth favorite. And whenever one of the other kids screwed something up in one of the
01:24:53
funniest things you'd ever seen, me, my wife and I would be sitting in our bedroom and Brandon would come running
01:24:58
in and say third and he'd run back out. [laughter] And he was doing this when he was like
01:25:05
12, you know, so it's hysterical. So that's that's a really a funny question.
01:25:09
And uh you know, I have I have the best wife. Uh she's both you I've been
01:25:15
married 31 years. Uh, I love her to death. She's she's just a wonderful woman and a spectacular mom and uh we
01:25:25
have great kids, really smart, really capable because, you know, great mom, great mom, and uh and we're really
01:25:34
close. So, people ask me like, "Where'd you go on vacation?" I said a simple
01:25:38
question. I asked my adult children where they wanted to go, and that's where we went. Yeah.
01:25:43
>> Because if I went somewhere else, they wouldn't go with me. >> Yeah. and I want them to be there. And
01:25:47
there was a picture of me with uh with Bobby Kennedy in Aspen where there was absolutely no snow. And so you say,
01:25:53
"Well, why did you go?" Said, "Because my adult children are here and that's
01:25:56
where I [laughter] was." We both were on the same uh >> You're on the same train,
01:26:00
>> same page. So I think I think if you have uh I I found the right girl for me
01:26:07
and and so I have the best family and uh and it lets me do this and lets me be completely committed uh to the
01:26:16
government and uh you know I was very successful in business. You know, I had whatever company that
01:26:23
did more than 10 billion dollars of revenues a year, made lots of money, and I don't have it anymore. I was I used to
01:26:31
joke that I was the only commerce secretary who had patents, but I have none cuz I had to I had [laughter] to
01:26:37
divest all of them. But I understand the patent office. I understand I understand
01:26:42
business. Donald Trump understands business. And we have really really impressive people
01:26:49
in this cabinet who are fun to work with and you are going to see great things in
01:26:54
the second year. >> Howard Lutnik, thank you for joining all in. >> It was really fun talking.
01:26:58
>> Thank you. >> All right, besties. I think that was another epic discussion. People love the
01:27:04
interviews. I could hear him talk for hours. Absolutely. >> We crushed your questions in a minute.
01:27:09
We are giving people ground truth data to underwrite your own opinion. What do you guys think? That was fun. That was
01:27:14
great. [music] I'm going all in.