Howard Lutnick: How America Can Hit 6% GDP Growth in 2026

Summary

Commerce Secretary Howard Lutnick returns to the All-In Podcast for a year-in-review discussion covering the Trump administration’s trade policy, tariff strategy, and economic vision for America. Lutnick explains the philosophical framework behind the administration’s tariff approach, revealing that the goal is to rebalance America’s $26 trillion net foreign ownership deficit - where foreign countries now own that much more of America than Americans own abroad. He details how the country-by-country tariff strategy was designed to incentivize foreign investment and domestic manufacturing while generating revenue that could eventually reduce taxes on Americans.

The interview covers major trade deals including Japan’s unprecedented $550 billion investment commitment where Japan finances American infrastructure projects (like nuclear plants) in exchange for reduced tariffs, with America receiving 90% of profits after Japan recoups its investment. Lutnick discusses pharmaceutical pricing victories where drugs like Ozempic and Mounjaro are now available for $149 instead of thousands, the restructuring of the CHIPS Act to get better terms from companies like TSMC (expanding from $60 billion to $165 billion in US investment), and the Nvidia deal allowing H200 chip sales to China with a 25% tariff.

Lutnick projects 5-6% GDP growth for 2026, driven by $18 trillion in committed capital investments, 30 new construction projects already launched, and the administration’s focus on eliminating an estimated trillion dollars in fraud. He emphasizes the administration’s goal of making American workers better off - noting electricians at data center projects earning $500,000-$750,000 annually - while maintaining tariff revenues that could eventually replace income taxes for those earning under $150,000.

Highlights

”Trump’s Tootsie Roll test”

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“He handed me a Tootsie Roll like ‘What’s this?’ It’s a Tootsie Roll. ‘Where’s it made?’ It’s made in America. ‘Well there you go. You gotta be on our team.’” — Howard Lutnick, 2:09

”$26 trillion owned by foreigners”

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“Foreigners own $26 trillion of American goods. A trillion of that is farmland. What if they just bought Apple and put a Chinese boss in charge of all your data? You are selling America to foreigners.” — Howard Lutnick, 14:30

”The Japanese don’t buy Chevrolets”

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“You know who owns the auto industry in Japan? Yakuza. So if you own a Chevrolet dealership, they come in and sit in your dealership. So you buy Chevrolets, you buy American? No, no, we don’t do that.” — Howard Lutnick, 20:20

”Electricians making $500-750K”

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“The electricians we’re hiring are making $500,000 to $750,000 a year. That’s what they’re making. In the semiconductor factory. Because we need them so badly.” — Howard Lutnick, 1:06:45

”TSMC got rid of DEI for leverage”

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“The day before I got sworn in, TSMC got rid of their DEI programs. Well they got something from me that they want, and they took that off because they knew it would matter to me. That’s called leverage.” — Howard Lutnick, 1:14:30

Key Points

• Air Force One Putin Meeting Story (0:00) - Lutnick shares humorous story of falling asleep on Air Force One while Trump negotiated with European leaders, getting hit with a Tootsie Roll by the president who joked “while you’re napping, we’re trying to settle world peace”

• Outcome-Driven Leadership Philosophy (3:12) - Lutnick’s goal is to be the cabinet secretary who has the most fun, emphasizing outcomes over effort - “if I worked really hard and it failed, it’s a fail”

• Commerce Department Restructuring (5:26) - Cut from 52,000 to 40,000 employees, eliminating outdated programs like an advanced manufacturing department set up in 1986

• Commerce Department Scope (7:28) - Covers sectoral tariffs (BIS), business advocacy (ITA), telecommunications/spectrum (NTIA), AI advancement center, patent office, NOAA, space commerce, and GDP reporting on blockchain

• Trade Deficit Rebalancing Framework (12:59) - America went from $148 billion net ownership of foreign assets to $26 trillion owned by foreigners; the tariff strategy aims to restore balance

• Country-by-Country vs Universal Tariffs (16:30) - Trump chose country-specific tariffs as more nuanced approach; couldn’t do this in first term due to advisors who believed in traditional free trade theory

• Japan Deal Structure (19:50) - $550 billion investment where Japan acts as LP, America as GP; 50/50 profit split until Japan gets money back plus interest, then 90/10 to America

• Foreign Manufacturing Subsidies (24:00) - Chinese steel costs $250/metric ton (free power), Korean/Japanese subsidized at $400, while US costs $700; US went from 40 to 10 blast furnaces

• China’s Chaos-to-Prowess Strategy (28:30) - 50 Chinese provinces each building 2+ electric car companies, overproducing then dumping at losses (selling $30,000 cars for $15,000) to destroy foreign competition

• Staircase Negotiation Strategy (36:54) - First country gets best deal; each subsequent deal must be better for US; India missed their window by not calling when scheduled

• Pharmaceutical MFN Pricing (43:48) - US pays $1,000 for drugs while Europe pays $175; Trump demanded Most Favored Nation pricing; Commerce used tariff threats as leverage

• Ozempic/Mounjaro Price Drop (49:00) - Weight loss drugs now available for $149 on Medicaid/Medicare instead of thousands; Merck giving top drug to government for free; saved $25-35 billion/year

• Gold Card Immigration Program (53:28) - $1 million investment for green card; sold $1 billion worth in first week; designed to bring in top quartile earners vs current bottom quartile average

• Fraud Focus for 2026 (1:00:00) - Estimated trillion dollars in annual fraud; combining Commerce, Treasury, and HHS data to cross-reference Medicaid/Medicare recipients with income

• GDP Growth Projections (1:03:48) - Expects 5% GDP growth in early 2026, potentially 6% if Fed cuts rates; Q4 2025 artificially low due to furlough accounting rules

• CHIPS Act Restructuring (1:11:49) - Instead of giving TSMC $6 billion (Biden approach), Trump threatened 100% tariffs; got TSMC to expand from $60 billion to $165 billion investment

• DEI Requirements as Leverage (1:14:00) - Used DEI compliance requirements in CHIPS Act contracts to declare companies in breach, then renegotiated for larger investments in exchange for waiving requirements

• Nvidia China Deal (1:16:00) - H200 chips can sell to China with 25% tariff; chips shipped to US first for testing to prevent enhancements; based on Jensen Wang’s argument about China’s national champion

• Intel 10% Government Stake (1:20:00) - Converted CHIPS Act grants into government ownership; money can be used to fix Social Security or reduce deficit

Mentions

Companies

• Boeing (9:35) - Senior executives follow Lutnick around; every deal includes Boeing plane purchases
• Toyota (20:00) - Example of Japanese auto manufacturer with subsidized supplier network
• TSMC (1:11:49) - Expanded US investment from $60B to $165B; achieving yields matching China’s best plants
• Nvidia (1:16:00) - $5 trillion company; Jensen Wang negotiated H200 China sales with 25% tariff
• Intel (1:20:00) - Government now owns 10% stake; converted from CHIPS Act grants
• Volkswagen (29:50) - Being put out of business by Chinese EV dumping
• Eli Lilly (49:00) - Manufacturer of Mounjaro weight loss drug
• Novo Nordisk (49:00) - Manufacturer of Ozempic weight loss drug
• Merck (50:30) - Giving their top drug to Medicaid/Medicare for free
• Micron (1:08:00) - Groundbreaking tens of billions dollar factory in upstate New York

Products & Technologies

• H200 Chips (1:16:00) - Nvidia chips now allowed for China export with 25% tariff
• H20 Chips (1:17:00) - Had more memory than H100 despite lower flops; was “oddly enhanced”
• 6G (10:11) - Commerce Department responsible for spectrum planning
• DeepSeek (10:34) - Commerce studies and publishes comparison reports when new AI models launch
• Ozempic/Mounjaro (49:00) - Now $149 on Medicaid/Medicare instead of thousands
• GPUs (1:12:30) - AI chips are refrigerator-sized vs tiny phone chips; 10 per wafer vs 4,000
• Blockchain GDP (11:00) - Started publishing GDP data on blockchain in July

People

• Donald Trump (0:25) - President with “best intuition of anybody I’ve ever met in the whole wide world”
• Marco Rubio (0:43) - Secretary of State; on secure call with European leaders
• Steve Witkoff (0:46) - Special envoy; elbowed Trump to point out sleeping Lutnick
• Putin (0:25) - Met in Alaska for four hours
• Zelensky (0:49) - Called after Putin meeting
• Keir Starmer (38:00) - UK Prime Minister; completed deal Thursday afternoon before Friday deadline
• Narendra Modi (39:30) - Indian PM who missed the call window; now further back in line
• Bobby Kennedy (47:00) - HHS Secretary; led pharma negotiations with Commerce as “the hammer”
• Dr. Oz (47:30) - Part of HHS team; did “spectacular job” on pharma deals
• Chris Klob (47:30) - Part of HHS team on pharma deals
• Jensen Wang (1:16:00) - Nvidia CEO; “national treasure” who negotiated China chip deal
• Jameson Greer (16:50) - USTR; one of the “believers” in tariff strategy
• Scott Bessent (16:50) - Treasury Secretary; aligned on tariff approach
• Admiral Perry (19:55) - Historical reference to 1853 opening of Japanese market
• Chamath Palihapitiya (2:24) - All-In host; conducted interview

Surprising Quotes

“While you’re napping, we’re trying to settle world peace.” — Trump to Lutnick after hitting him with a Tootsie Roll on Air Force One, 2:09

“We went from $148 billion net ownership of the rest of the world to $26 trillion the other way. They own 26 trillion of us more than we own them. What you’re saying is we became effective employees of the people that were producing the things that we created.” — 14:30

“The only American cars really in Japan are Chevrolets driven by the Yakuza. So you can’t come home with a Chevy and people think, ‘Woo! You got a new job, did you?’” — 20:20

“We have to pay electricians between $500,000 and $750,000 a year, which is more than what we pay the engineers that work at the models out of Facebook.” — Chamath on data center labor costs, 1:06:45

“You didn’t build a daycare center in the middle of your clean room fab. You’re in breach. How about I add 100 billion? Instead of building 60 billion, you build 160 billion.” — Lutnick on using DEI requirements as leverage with TSMC, 1:14:30

Transcript

0:00 What was the feeling the first time you were on Air Force One? It’s just - or Marine One like is there a special thing where you’re just like what is going on? Yeah. When you’re on these things like it’s amazing. Right. You are where real conversations happen. We went to see Putin. So I get on Air Force One at 5:00 a.m. He gets on at 5:45. We fly to Alaska. So, we’re talking about then we’re there for four hours with Putin and then we fly back.

0:43 Now, Marco Rubio and Steve Witkoff go take a nap because we have to wait for Zelensky to wake up to call Zelensky and we have to wait for the European leaders to wake up, right? Because it’s the middle of the night. So I stay up with the president and we’re just chatting like we’re just chatting watching golf. I mean we just like it’s a lot of hours.

1:04 So then Zelensky wakes up. So they get on the phone with Zelensky and he talks to Zelensky on his phone and then when he calls the European leaders when they get up they want to have a secure call. So there’s three secure handsets in his office. So he’s on one, Rubio’s on one, and Witkoff’s on one. And I’m just sitting on the couch. This is in Air Force One. In Air Force One in his office.

1:31 So I’m just sitting on the couch and I’ve been up for like 20 hours, okay? And the president’s been up for 20 hours, but he’s on the phone and the European leaders are talking. So I’m just sitting there and they’re all on handsets, so I can’t hear a word that anybody’s saying. And I’m just sitting there. So I fall asleep. Okay. So I’m just sitting there. They’re talking on the phone like right there and I fall like this.

1:52 So Witkoff elbows the president, right? Points to me and then the president unrolls a Tootsie Roll and tries to throw it into my mouth. He hits me in the face. I wake up. He goes, “Howard, while you’re napping, we’re trying to settle world peace.”

2:24 Well, welcome everybody to the All-In interview. I’d like to welcome Secretary Howard Lutnick, our esteemed Secretary of Commerce. When we did the first interview with you, it was at the beginning of the administration. It was almost a year ago, and to be honest, it turned out to be one of the most popular things we’ve ever done. There’s the Elon Musk view factor, but then there was the Howard Lutnick view factor and they were pretty much side by side actually.

2:53 It’s great that you gave us a 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 year gone and specifically I would love to understand what surprised you as a businessman walking into the government.

3:12 So overall, you know, I have a goal, which is I want to be the cabinet secretary who has the most fun, right? And so I set out with that goal. And which means I am outcome driven, right? I don’t really buy into I worked really hard at something and it failed. If I worked really hard and it failed, it’s a fail. If I got lucky and it just all fell into place and I did nothing, it’s still success, right? Because the outcomes are what matter, right? You’re not telling people how hard you worked and failed.

3:51 So, how you get things done in government is fascinating. It’s just different. What happened is most people who’ve ever been in government tend to be incremental. They come in, they say, “How did this work?” So someone explains how they work and they try to move the ball 10% forward. They don’t really rethink it entirely.

4:18 And so my objective was to come into this department which is an awesome, incredible diverse department and really think through its powers and its possibilities, reimagine them, rethink them, hire people and then mold those people to think outside the box. And so the first three months was really getting people to think, can I really challenge this? Can I really do this? Can I really try to do this? And then trying to convince everybody around me that this is an okay way to do it.

4:53 The way it was done yesterday isn’t right. It was just what they did yesterday. You’re not even saying it’s wrong. You’re just saying it’s not you. Do you get the organ rejection though of career bureaucrats who think, “Wait a minute. Howard’s out for my job or this is just a totally different way of doing things. I don’t feel comfortable with this. I don’t necessarily agree.” We hear a lot about sort of this deep state, whatever that is, like this career lifers that sort of push back on radical change.

5:26 Well, look, in the beginning, we cut, you know, 20%. Like I walked in the door here with 52,000 people in this department and now there’s 40,000 people in this department. So, the idea is if you’re going to cut 12,000 people, you have to do it fast. Right? So that everybody understands the next shoe is not going to drop tomorrow.

5:50 And find where we had programs that just were like this program was started in 1978. You’d be like, why are we doing it now? We had a department that was supporting advanced manufacturing set up in 1986. What were they doing as advanced manufacturing 40 years ago as opposed to what people are doing now?

6:15 So it was really not taking out what’s the core. And so we did that quickly and then I went and met every bureau, had town halls. I went to their offices and I basically told them where we were going, what we were doing and why. What I learned about government is the people here are very narrow experts. They’re amazing their knowledge of this particular topic.

6:48 So there’s not generalists in government, but you have someone who’s great at this, someone who’s great at this, someone who’s great at this, and then your job as the secretary is to weave that blanket together, right? So that these specialists succeed. And so when you give them tasks that maximize their capacity, they get jazzed.

7:16 And so I’m getting amazing output from this department because they’re jazzed because someone appreciates their capacity and is driving it to success. I want to jump into some of these verticals of expertise that you oversee, but it may be useful for the audience actually if you just gave an overview of the scope of commerce because it is incredibly vast from trade to job creation to NOAA to the Census Bureau to spectrum. There’s a lot of things that you can shape on behalf of the United States.

7:49 So tariffs, which have been a big conversation, there’s two types of tariffs. There’s general tariffs that’s in front of the Supreme Court. And then there’s sectoral specific tariffs. Those that are specific, industry specific are in this building. And they’re part of BIS, the Bureau of Industry and Security. And that is both where we have export controls. We don’t want to sell our best chips to our adversaries. We don’t want to sell whatever is the fill in that’s the Bureau of Industry and Security.

8:31 Or do we want a license just to make sure you use it in this sort of way or that sort of way. All of that is and they have guns and badges. Right. So they have guns and badges because they have to protect and defend that. And they find people and they also control the auto tariffs, the steel tariffs, pharmaceuticals, which we can talk about a bunch because it’s been insanely successful driving down the price of pharmaceuticals in America.

9:01 So that’s the Bureau of Industry and Security, BIS. Then you have ITA which basically is the advocate for business. We’re I’m the secretary of commerce. So that’s like a fun job. Like you’re in charge of commerce. So we help companies sell things around the world. That’s our job. And we help states sort of bring in business to build and grow here. So we’re sort of the import export assist model.

9:31 So we’re always helping Boeing, you know? So the guys, the senior executives of Boeing follow me around like a puppy because 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, they buy 100 Boeing planes. So we’re always helping American companies sell overseas and we’re helping companies invest in America. Help them with their permits. Help them with whatever they need to build and grow so we can grow our American jobs here.

10:04 So those are two examples. Then we have NTIA, telecommunications that includes spectrum like how are we going to do 6G like how do the pieces fit together that’s our responsibility as the lead advisor. And then inside of that of course we have the AI, the center for AI advancement. So we study and then we put out reports.

10:34 Like when DeepSeek comes out with their new model and there’s all this press about it, our department literally painstakingly studies it as compared to our models and publishes what’s the difference. So that we actually there’s a standard of knowledge, not the press making this that or the other thing.

10:55 And then we put out GDP, right? And we analyze and what’s interesting about GDP is people don’t realize what we do is we use the census so there’s business census calling around to companies and it’s not really calling around anymore it’s more economic connection to companies through APIs. And one of the keys for me is to get rid of everything that’s manual that’s left and make it all automated, make it all connected with APIs.

11:22 Create GDP and then we put GDP out on the blockchain because if I’m publishing GDP, why not? Like where’s the holdup? And you started doing that in July, I think. I mean, how fun is that to say, why don’t we do that? And then, you know, we go to the Oval Office, I chat with the president, he goes, great. And then we do it.

11:43 I mean, the reason you want to work for President Trump is his intuition is so extraordinary and his knowledge base is so amazing that I can go in and talk to him about should we put GDP on the blockchain and just before that he was doing something completely different, something completely different. And then he’ll chat with you about 3 or 5 minutes and it goes that sounds great and then you just go do it. So it’s really fun.

12:11 We have the patent office, and if you think of how valuable intellectual property is, how do we protect it? How do we defend it? What’s the right way to think about it? And you have NOAA, which is you know, we have inside of NOAA, of course, is the word atmosphere, right? It’s oceans and atmosphere. What does that mean? Oceans and above 50,000 feet is space. Space commerce.

12:35 So I have now the office of space commerce which I’ve taken out of NOAA and have put in my office so that I can reimagine how do we handle commercial satellites.

12:50 Okay. So we’re going to dig into as many of these areas as we can but let’s go back to the first one. So can you bring us into the room leading into April 2nd? Bring us into the room debating tariffs, debating where you wanted to start, debating the game theory, what were the puts and takes and how did you come up with the decisions you made and then if you could just reflect back on what went right, what would you want to redo and what was maybe and still is misunderstood.

13:22 So the president in his first term he’s been talking about tariffs and how the trade deficit of the United States of America is really a ripoff of America. People who don’t weigh in very deep say well you have a trade deficit with the supermarket. You’re always buying from the supermarket so you have a trade deficit with the supermarket. That’s just silly.

13:48 If you think about it, let’s say there are two islands. One produces and one invents. So, the inventor lets the other island produce and keeps buying it from that other island, pays them the money, and that other island uses the money to buy the inventor’s island. And over a period of time, the producer owns the inventor’s island and the inventor works for the producer because he ran an infinite trade deficit and kept paying his money away.

14:21 So what’s supposed to happen when I was in college, my freshman and sophomore professors basically said if you run a trade deficit, you’ll keep taking your silly paper money and giving it to them and buy their wine and buy their cars and buy all their cool stuff and sooner or later they’re going to say, “Hey, I don’t want your stupid paper.” And your dollar would devalue.

14:47 But what if you’re America and you invent the light bulb and then you invent the transistor and then you invent the GPU and you’re just too darn smart. So what they do with those dollars - we had net ownership of the rest of the world. So comparing the rest of the world’s ownership of America and our ownership of them, that counts everything, their bonds, companies, stocks, everything. We were net an investor of $148 billion. More of them than they owned of us.

15:22 Fast forward to 2024. $26 trillion the other way. They own 26 trillion of us more than we own of them. What you’re saying is we became effective employees of the people that were producing the things that we created. Right. So when we call - so Donald Trump says we’re getting ripped off. We need to fix this. And sort of like these junior economists fight it and say no.

15:54 Let me just stop for a second. That is the first time I’ve heard that. It is an extremely elegant framing actually. It sets up an incredibly powerful way to measure the effectiveness of tariffs. Which is that imbalance is the north star? Yes. Once we own at least the same of them as they do of us, that’s balance. We’re balanced. And right now we’re at $26 trillion.

16:26 Why would we have - so what happens is you call a country up and you say, “I’m going to set a tariff.” They say, “Wait, wait, wait. Before you set a tariff, how about this? We’ll invest $200 billion in your country and Toyota will build a factory and Siemens will build a factory and they’ll all build a factory.” And I’m like you’re just buying us. You’re literally buying us. I understand what’s better for you investing 200 billion in America.

16:57 So what happens is that natural argument which was always previously successful falls on deaf ears. And I’m pointing over there because that’s his office. The White House is like right there. And he says you’re only investing here because it’s great for you. The answer is I want to rebalance and that’s what we’re out to do. Build it here, sell it here. Fine. Or pay for the privilege of selling it here.

17:28 How did you set the rates? Well, the president on the campaign trail had two views. The debate and he was really debating with the team and inside his mind. Does he want to set a universal tariff or a specific country by country tariff? Obviously universal tariff it’s easy you know Tuesday morning you say pick a number 10% shazam.

17:55 But we settled on a country specific model - much more complex, much more difficult but much more nuanced, much more clever, and much tougher. And he couldn’t do that in his first term because he didn’t have believers around him. He had too much of the people who believed that that sophomore professor’s ideals. And even though we were out $26 trillion, they thought that was too casual a comment.

18:29 And so, this administration came in with incredibly sharp people, me included, Jameson Greer, Scott Bessent, who were on side, on board driving for these outcomes. Let’s double click into a couple of these deals because some of the terms you got, it would be just great if you could walk us through how you convince them. So, let’s look at Japan.

18:55 So the Japan trade deal you walked out with I think it was $550 billion of commitment and terms I mean I mentioned on the podcast I’ve never seen terms like this before. Which you can explain which is basically you know Japan gets your money back then you get 90% of the profits. Can you just walk us through when you go into the room with the Japanese government, just get us to the outcome, how do you negotiate that deal with them?

19:28 Okay. So, let’s spend some time in Japan because it’s really fascinating. So, when thinking about Japan, I reminded the president in 1853, Admiral Perry went with an armada and cannons and still had trouble opening the Japanese market.

19:50 So the Japanese market for cars as an example, 94% of cars driven in Japan are Japanese. They don’t drive German cars. They don’t drive Korean cars. They don’t drive American cars. The only American cars really in Japan are Chevrolets driven by the Yakuza. So you can’t come home with a Chevy and people think, “Woo! You got a new job, did you?” So it’s a culturally, technically, and economically closed market. So even if you opened it technically, and even if you opened it economically, you may not be able to open it socially.

20:34 So what we did is we said, “All right, you’re going to pay a 25% tariff.” Simple. You won’t open your market. I can’t get you to really open your market. So, you just pay us 25%. And that’s simple. We don’t have to negotiate.

20:57 So, their leadership called and said we can’t do that. And when someone says I can’t do that, I’m like why? So they explained why. They said look the way the Japanese auto manufacturers work is the government subsidizes the machinery that went to small manufacturers. So what they did is let’s say company A could have a thousand small companies and they make the cup holder for this particular model. And so they have 50 people who work at this company who make the cup holder for Toyota. But that machinery was subsidized by the government and so you have thousands, tens of thousands of these companies and so they can’t pick them up and move them to America.

21:48 Let me ask you just a question before you go back to this. Was it surprising to you that not just Japan, but I’m sure you encountered it everywhere, all these other governments would be willing to shape and subsidize their own domestic productivity, whereas Americans were a little bit more on their own?

22:08 It’s amazing the subsidies, the assistance, it’s not a level playing field that everybody else does for their own domestic internal economy. But not on every product. But on many - like you know we set steel and aluminum tariffs. You’d say like why do you do the whole steel and aluminum thing?

22:30 You’d say well if the Chinese give power, give the power to the steel producer free. Think of steel - it’s like brown dirt. So you process the brown dirt to make it iron ore. But you’ve all seen it’s like dirt. And then you know how much power you have to put into that to melt it to make it look like one of those things we’ve seen on TV where you’re pouring the iron ore.

23:00 And imagine if I gave you the power for free. You’d be making your steel for 250 bucks a metric ton. And you’d say, “How much does it cost in America? 700 bucks a metric ton.” So they’re going to put our guys out of business. And then Japan subsidizes it. Korea subsidizes it. So maybe they can do it for 400 bucks a metric ton.

23:27 And meanwhile our - so we start with 40 steel blast furnaces. Now we have 10. And if we kept going, we were going to have zero. And then what happens is you become basically subservient. If you need steel, you want to build your own missiles, you have to call another country.

23:50 Now they may be your allies like Japan and Korea and you can call them but you are not self-sufficient. So Donald Trump says we need steel, we need aluminum, we need copper, and we need to make our own semiconductors. We need to make our own pharmaceuticals.

24:12 And once you understand this, and you really think about it. Donald Trump is not only is he completely correct, it actually goes to the thank God. Like you study pharmaceuticals and you really study them and you say, “Well, these generic pharmaceuticals are made in India.” Say, “Oh yeah, good. India’s our ally.” But the ingredients come from China.

24:39 So if there’s one nut or bolt that you need and it comes from China, they don’t send it to you. Like there were these things called magnets, okay? And magnets go in a car. The value of a magnet that goes in a car is 20 bucks. You’re buying a $30,000 car. It’s a $20 part. But if they don’t have it - car. Oh, sorry. It can’t work.

25:06 Where do we get that part from? Well, China sells them. They buy the dirt, the ingredient for $55 a pound and they sell you the finished magnet for $55 a pound. So no one’s going to make the magnet if you could sell the raw material for 55 bucks. So they’re basically just losing money. And the answer is right.

25:30 Do you think that this mercantilism was it a purposeful strategy to weaken America or do you think it was just a byproduct of capitalism?

25:42 The answer is yes. The Chinese economy is one of overproduction. They have 50 mayors provinces and each of those provinces is trying to succeed. So each of those provinces wants to build an electric car company. And the government puts in all the money, builds the capital, gives them the power, invests. So if you’re the mayor, you want the winning electric car company because remember, China does not have oil and natural gas. So they have to build electric because they have coal. So they have to build electric. We don’t. We’re being fools to think that we should have batteries and everything that they make that we don’t. That’s just foolish.

26:22 But they - so that means if you have 50 mayors and they all have what? One electric car company. Nah, no. They’re probably going to have two just in case. So that’s 100 electric car companies and they’re all trying to kill each other subsidized by the government so they can cut their price 30%. Why? Because the government just says, “Look, let’s just try to undersell everybody else.”

26:49 And then they make so many cars. What do they do with all these cars? So then they dump them and they take the 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 say 15,000 for this car. This is an amazing car for 15,000. That’s because it cost 30,000.

27:14 And so what happens is that has the effect of putting Volkswagen out of business. So what happens is it’s their model which is an attack chaos model, but the attack chaos model has overcapacity. And then they turn that overcapacity into an asset. Says, “Let’s dump the overcapacity. We’re going to lose a fortune.” Okay, but the government’s just paying. We’re going to dump that overcapacity into America or into Europe or into anybody who’ll take it. We’ll put their industry out of business and then we’ll have them over a barrel. We’ll turn our economic chaos into international prowess and leverage.

27:57 So that’s - and so then the tariffs now basically slow that leverage down because it takes that economic incentive off the table. Do you need to follow up with some other set of structural changes though to right the ship in the long term? What are the things that we need to do so that in eight years or 12 years if the tariffs were to change, if a different administration takes a different point of view, what is structurally going to be left behind that prevents this from happening again?

28:30 Well, with respect to China, if we blink, they will sell below cost in America and drive our domestic companies out of business and then we will be beholden to them. That’s sort of a simple math.

28:47 If you think about it, they spend a fortune convincing everyone that they should be environmentally friendly and have an EV car. But if Europe doesn’t make batteries and they say have all EV cars by 2030, then who are they going to buy the batteries from? They have to buy it from China. And now they need to buy it from China which means what is their foreign policy with respect to China? It’s very positive.

29:18 They trade economic, basically I’ve gotten prowess over you so that you’re going to let me do this, that, and the other thing. And eventually, they’re not playing with the same rules that we play. And so when you go around the world and you study the world, like Japan doesn’t do cars by the same rules that we do.

29:42 So they had to have cars be lower than 25%. 25% was basically a number that choked them. And so we analyzed together with them that 15% would be the number they could live with and keep making cars and build more here.

30:01 And then I said, “Well, but why would we - since you’re not really going to open your market? You’re not really going to let us have access. How are we going to do it?” And then I spent months going back and forth with the Japanese and President Trump with different ideas. How about this? So if you suggested I got it right the first time, that would not be true. I got it right eventually. I’ve always described my business success in life. I always came at it like this, and then like this, this, like this, like this, straight to success. Sooner or later, I got through.

30:43 So what we came up with was $550 billion. This is not foreign direct investment. This is not Toyota building a factory in America. This is they literally will finance any project we want to build in America as long as it’s like a good cash flowing project. Nuclear, we want to build a hundred billion dollars of nuclear plants. They will pay for it.

31:10 So what happens is they’ll borrow the money on like a 30-year bond in Japan. So the Japanese government goes and raises the 550 billion from their domestic bond holders. From their domestic bond holders. So they’re an LP to you and you’re the GP. Exactly the right thing. They’re an LP. They give us the equity. We build the nuclear power plant and then it starts selling power and we split the cash 50/50 until they get back their money plus their interest.

31:44 So that means in 30 years the taxpayers of Japan broke even and their dividend was a reduced tariff that every day they had a lower tariff. They have more employment. They had this and that and you know what their stock market’s up 20 something percent. Not down. Up. So, you know, that’s the point which is it didn’t cost their taxpayers money over time.

32:13 Now, it’s pretty simple to understand how much we’re going to make. You’d say, well, if it’s 550 billion and their interest rates are pretty low. So, let’s say over 30 years you’re going to get 650 billion. When we pay them back 650 billion, if you say to me, how much did America make? I would say 650 billion because we split the money 50/50.

32:39 And after they get their money back, because nuclear power plants last a long time, then the cash flow goes 90 to America and 10 to Japan. And when you say to America, is there an account? How does that money then get spent or allocated?

32:57 The only bank the United States of America has as far as like the secretary of commerce sees is called Treasury. So we have accounts at Treasury and all the money goes into Treasury. So all the tariff money goes into Treasury. All this money just goes into Treasury. So it reduces our deficit and it reduces - it is taxes paid by others for us to get our house in order. That’s why the president talks about the external revenue service.

33:27 In this case you’re going to make - you’d say all right well over 20 years you probably make 30 billion a year. That’s 30 billion a year. You know how much tax we’d have to raise on Americans to cover 30 billion a year? That’s 30 billion a year just on those trades. And then you have the tariffs are 500 billion a year now. And they will grow over time to a trillion a year. And that money is not money we have to pay in taxes. And eventually that puts our house in order that lowers interest rates, drives our economy, but most importantly we don’t have to pay.

34:05 President Trump has talked about this. He said that as you kind of execute the tariff plan and extract this incremental capital, you could see a ratable reduction in income taxes. Is that the right way to think about this? Or do you think there are other ways to spend the money first that we need to before we -

34:24 Who paid for no tax on tips, no tax on overtime, no tax on social security? Tariffs. So that’s a down payment. But that’s the idea. We should be able to reduce the tax burden from the bottom up. Help Americans who make less than $150,000, who earn overtime, who earn tips. Let’s reduce their tax burden. Let’s help America. And that’s, by the way, that’s 85% of America. It’s not like it’s a subset.

34:57 And so I think the president is deeply focused on using the power of his administration to right a whole bunch of wrongs that have been ripped off about our country and that we are the richest country in the world. And that means we don’t have to take things away from people.

35:16 Everybody assumes to balance the budget. If you asked a politician how you would fix social security, they would say take the retirement age out. Take away. They would never say we are the greatest country on the earth. We have the greatest economy on the earth. Can’t we figure out ways to enhance our revenues to keep - the richest country in the world should be able to give people retirement at 65? We shouldn’t change a darn thing. And that is his thinking.

35:48 And that’s why it’s so much more powerful than any politician before. Politicians think all they have to do is give or take. The way that you’ve explained this, it makes an enormous amount of sense. It’s like you set the stage of here’s the historical imbalance. Here’s how we want to reset it. We want some investment that we’re going to get you whole, foreign country, but at the end of the day, this is about American exceptionalism.

36:15 It’s worked in Japan. It’s worked in Korea. You did the deal with Europe. You did the deal with the UK. What’s sort of out there that’s still there? I think India is kind of still out there. Although it seems like they are capitulating a little bit. I saw that they just bought a lot of liquefied petroleum gas from the United States in November. What are the big sort of hot button places that you want?

36:40 I’ll tell you a story about India. So, 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 Fridays from now. That was the date that the train was going to leave the station by two Fridays because I have a lot of other countries doing things and if someone else is first, they’re first.

37:04 And President Trump does deals like a staircase. First one gets the best deal. You can’t get the best deal after the first guy went. Everyone says, “I want the UK deal. I want the UK deal.” The answer is no. They were first. They took the chance. They moved quickest. They’re first. Second up a stair. So that sets the floor. And then the next one’s got to be higher. And then the next one higher. And then next one higher.

37:33 So he does things that way because that way it incents you to come to the table. You could have three countries who are the second deal. They all get done the same time. But if you want to wait and see how it goes, it’s at your risk.

37:50 So, he does the UK deal and they had to get it done by Friday. And Thursday afternoon, Keir Starmer’s on the phone, the president, they do their deal Wednesday night and on Thursday, we have a press conference and we announce it. Okay. So, everybody asked the president, who do 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 a couple of times publicly. It’s not a big secret.

38:22 And we were talking India and we told India you had three Fridays. You put them on a shot clock. Well, they have to get it done because what happens is I have lots of other countries and when those other countries do their deal, the staircase goes up.

38:41 Now the president during all these deals, he would refer to me as the greatest table setter who ever lived. Okay? Because you’ve never had anybody who was as successful as me as a businessman before who’s just the table setter basically. 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 his deal. He’s the closer. He does the deal.

39:10 So I said, “You got to have Modi. It’s all set up. You have to have Modi call the president.” They were uncomfortable doing it. So Modi didn’t call. Wow. So that Friday left. Middle of the next week, we did Indonesia, the Philippines, Vietnam, we announced a whole bunch of deals. Malaysia in that period. So we did these whole bunch of deals.

39:37 So that staircase - and because we negotiated them and assumed India was going to be done before them. I had negotiated them at a higher rate. So now the problem is the deals came out at a higher rate. And then India calls back and says, “Oh, okay. We’re ready.” I said, “Ready for what?” You know, it was like 3 weeks later. I go, “Are you ready for the train that left the station 3 weeks ago?”

40:07 So what happened is they just - sometimes there’s that seesaw and people on just the wrong side of the seesaw. When I was young in business and I was a trader one of my first jobs was a trader and when I would start on the wrong side of the seesaw - I’d buy and it would go down and then I’d sell it would go up another buy it would go down and sell - like when you’re on the right side of the seesaw you can’t lose. You buy it goes up and you sell it and it goes down.

40:40 But when you’re on the wrong side of the seesaw, what I used to do is I used to put the phone down. I used to go in the bathroom, fill a bucket with water, take a rag, and I would wash the plants in the office because it was much cheaper than me picking up the phone. So people would call and say, “Can I speak to Howard?” They go, “No, he’s in a meeting.” And meanwhile they’d look up and there I am washing the plant because whatever I did I would get back in there and I’d touch it and it would go the wrong way.

41:16 So what happened is India just was on the wrong side of the seesaw and it wasn’t - it was just they couldn’t get it done when they needed to and then they couldn’t get it done and then they couldn’t get it done. So what happens is all these other countries kept doing deals and they’re just further in the back of the line.

41:35 And now when they say but what I want is I want the deal in between the UK and Vietnam because that’s what I negotiated. And they remember and I remember and they say but you agreed and I said then. Not now. Then. And so that’s the problem. India will work it out. But it’s just, you know, there’s a lot of countries and they each have their own deep internal politics.

42:04 And to get something approved by their parliament or their diet or their - these are deeply complex things and we’re dealing with the world, but we’ve gotten them done. We got Europe done. We did Japan, then I did Europe, then we did Korea, and we’ve done country after country after country.

42:26 And these are durable, meaning these are deals that take care of the countries - autos, pharmaceuticals, semiconductors, things that really matter. And the tariffs have been incredibly effective. And you can use them to change the trade deficit. But you can also use them to change behavior. And we should spend some time talking about drugs.

42:49 Let’s double click into AI and drugs, but let’s start with drugs. So you were pretty integrally involved in some of the pharmaceutical repricing and manufacturing deals. Just walk us through what the goal of those were and how Americans will feel the impact of the deals that you’ve been able to negotiate.

43:10 Everybody who studies pharmaceuticals learns that America is the client, is the consumer, is the payer worldwide. We pay all the money. So these drug companies make 75% of their revenues in America and it’s 100% of their profits.

43:33 Because what happens is we pay let’s say $1,000 for a drug and then Europe says, “Yeah, we have socialized medicine. We’re not buying it unless - what’s your cost?” And the drug company says 100 bucks. So they say we’ll pay you $175. You can make 75 bucks. And then the drug company says no. And then Europe says, “Okay, I’m not buying it then.” You’d say, “What do you mean you’re not buying? You’re not going to give medicine to your people?” They go, “No, we can’t afford it.”

44:05 So eventually the drug company says, “Ah, fine.” So we’re paying $1,000 and they’re paying 175 bucks. Six times less. And you’d be like, “What?” And that is how the whole world’s drug model was working. We’re paying $1,000. Everyone else in the world is paying 175 bucks.

44:27 So Donald Trump says I want to fix it and I want MFN price. You want to charge us most favored nations. So we’re the cheapest price in the world. But you could charge them 500 and then you could charge us 500. Fine. But if you’re willing to sell it to them for 175 bucks, don’t come here and tell me that I have to pay $1,000. It’s just unfair. You’re not dictating price in America. You’re essentially dictating the lower bound price abroad. We are dictating fairness. Like if we’re your biggest customer, treat us fairly.

45:05 We’re not even saying treat us the best. We’re saying treat us fairly. I mean, it’s amazing. So he writes a letter to 17 giant pharmaceutical companies said, “I want MFN.” And I got to tell you, I don’t know a single person in this administration who thought he could do it. It was so audacious, so bold, so powerful. I was like, jeez. I mean, you just write a letter to all the big drug companies saying, “You’re going to give us MFN.” And you write a stern letter. And I’m like, okay, good luck with that.

45:40 How’s this baby going to work? And then so I sit with - we have this amazing meeting with Bobby Kennedy and his team and we say, “Look, I’ve got these 232 tariffs. I could smash these companies. Smash them because they all make it overseas and then exported to us and we’re all the money. So we could charge them any tariff we want. We charge them 500%.”

46:10 So, let’s do something that’s never been done before. Let’s literally be a team. You lead. So, Bobby and his team who were amazing, Dr. Oz, Chris Klob, I mean, these guys did spectacular job. They led, but I was the hammer. From table setter to hammer. So, now I’m the hammer.

46:35 So I’m like in the background like hammer and then say look you have two things we want from you. We want your best drugs at MFN prices. You can’t sell it to anybody in the world at a better price you sell to us of the countries that have money. We’re not talking about if you sell it to sub-Saharan Africa. We’re talking about the big countries, the OECD, call it the big 10 or the big 20.

47:05 Charge us the same and reshore and I’ll waive your tariff while you’re reshoring. Provided you do those two - or hammer. Just hammer. And what’s a hammer mean? I don’t know. Hundreds of percent tariff starting - I don’t know - what do you think 30 days from now? Just bang.

47:28 So you were just there in the corner. I’m like the handsome guy in the back. So if you see me at the meetings I’m like there. But if you look at the pictures that are put out everybody puts out the picture of Bobby signing and me signing. You say what are you signing Harry? I’m signing the no hammer rule.

47:51 So the result is Ozempic and Mounjaro are on Medicaid and Medicare for $149 instead of not on it. And generally for sale for thousands. So think about it. Instead of generally for sale for thousands, everyone in America can have it for 149 bucks.

48:17 And that’s going to reduce all - I mean it’s going to change these drugs. We had drug companies say you know what I’m just going to give it to you. One of the drug companies Merck said they’re going to just give us their number one drug in the world. They’re going to give it to Medicaid Medicare for zero. So we saved 25-35 billion dollars a year.

48:43 But more importantly, we made drugs accessible to America at a fair price and stop always being the one who pays. We are the richest country in the world and the world viewed us - remember when I was growing up, there were all these cartoons on TV and there was always this 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 starts looking at him. He looks like a big chicken leg, you know, he’s like starving.

49:15 So, he looks at the other guy, he sees him like - the world views us as a giant chicken leg that they should just - we’re so rich we won’t miss it. And so all the trade deals were bad, the drug deals were bad.

49:35 The immigration system is the most ridiculous thing. Imagine we are the richest most successful country in the world and we give a lottery. A lottery. So let’s say we have a lottery to come into America. If you win the lottery, you win. But who’s paying for the lottery? We are. So, it’s not like the normal lottery, everybody pays in a dollar and the winner gets x% of the money. Here, the people win the lottery and we lose.

50:09 Like it’s a win-lose and that’s - and you would say, gosh, why would we do that? And it’s only because Donald Trump is willing to literally challenge why are we doing this? Why are we doing that? He has incredibly capable people around him who are willing to challenge it and then come up with a better answer, attack that better answer and deliver the outcome.

50:38 Meaning just talking about it, as I said in the beginning, doesn’t count. You either change the immigration system, you change the price of drugs, you change the trade deficit which is awesome. You change the budget deficit of the country down $600 billion this year. You just relentlessly deliver.

51:00 What happens is if you have a businessman in that office and Donald Trump has the best intuition of anybody I’ve ever met. I could tell you stories - one day he said to me, what’s the flag on the back of those ships? And I was like I don’t know. He goes you ever seen a flag on the back of a ship that you know where it was from? I was like no. He goes why is that?

51:28 And then you look it up and the number one flag on the back of a ship is Liberia. All these ships, like all the tankers, all the tankers, cargo ships. And why is that? It’s a tax scam. It’s a flag of convenience. And then what they do is they then - so they make all their money on the seas and they charge the port as an expense. So they pick it up from Europe. It’s an expense. They drop it off in America. That’s an expense. And all their profits are on the high seas where they pay no tax.

52:01 So what do you think they do? Then they buy the ports. It’s all a tax scam. So the president by intuition sends us out - he sends me out. He loves to send me out to stuff because I just love the stuff and I find it.

52:20 And we’re going to attack it. The next year you’re going to see this government attack fraud. And the fraud is probably a trillion dollars a year of people who just have figured out how to rip off the system.

52:37 And the system, remember, America had open borders till 1914. The reason it had open borders in 1914 is because it gave you nothing. So like if you were sick, you couldn’t go to the hospital unless you could pay the bill. So if you were sick, you die. What do you want from me? Get a job, take care of yourself, or get lost.

53:03 And when we went to have a welfare state, you have to close the borders because if the people are going to give their money, they need to give it to each other. You can’t really open the border and say, “I’m going to give my money to anybody who wants to come in.” That’s getting it wrong.

53:22 So when people say open immigration is how we built America, they are right. And open immigration would be something interesting if we gave people nothing. Because if we gave them nothing, if they weren’t smart enough, capable, entrepreneurial enough, driven enough, they would starve to death. And so they wouldn’t stay here. They would self-deport.

53:48 But if you’re going to give them welfare and you’re going to give them food stamps and you’re going to give them housing and you’re going to give them this and that, then everybody’s going to come and just leech off of us and we’re going to pay and pay and pay.

54:05 On this immigration side, you’ve launched two versions of the Trump card, I think. There’s the million dollar Trump card and then the $5 million card. Where are those programs and how have they been working so far?

54:20 So it’s out right now, trumpcard.gov. It’s a really nice website. And what happens is the idea is to stop letting people into the country without a clear benefit to the country. You should come in if you’re going to give us a clear benefit to the country. Like it should be black and white. You’re going to help us.

54:45 So the average green card, if you looked for the last 5 years, the average American makes in the $60,000 a year and the average green card recipient made in the 40s. So we are bringing in the bottom quartile. Like what? Why? We’re the only country in the world who was bringing in the bottom - more likely to be on welfare, more likely to be on food stamps, more likely to be getting stuff from the government because they were all coming to get stuff from the government.

55:19 And so the idea for us is, okay, here’s the gold card. You want to come in, prove to us you’re going to make a benefit to this country, give the United States a million dollars, which pays off our deficit, reduces taxes we have to charge Americans, and then you come in, you’ve proven that you’re going to be a good citizen. We have to vet you. We spend 15,000 on the greatest vet we’ve ever done. And then you come in and you’re going to be top quartile, maybe top decile. But you’re going to help America be better.

55:52 Have you announced how many people have applied or the first batches yet that have been granted this? Not yet. The president the first week put out that we had sold a billion dollars worth in the first week. Wow. So, but there’s a process and this process is going along fixing the immigration system. Not letting people come in by lottery, selecting who they are, not bringing in people who would take a trainee job.

56:24 People who graduate universities around the world - look, I think H-1B is fantastic for someone who makes $500,000 who’s a cool engineer, but it’s not okay if it’s a $60,000 college graduate. Hire from the universities of America. Don’t hire from the universities of the world. It just doesn’t make sense.

56:48 And what happens is people steal the history of America and they lie, change the peace shape and try to stick in it by saying America was born with immigration and open. Yes, that’s when we gave nothing. But if you’re going to give everybody the gift of America, we better get something back.

57:10 And that’s why you’re hearing about all this fraud. These people came in in order to defraud America. It’s not like a random act. They figured this is the richest country in the world. We live in a crap hole. Let’s get out of here and these morons are going to let us have a BMW.

57:30 And we’re not going to be hardworking industrious people. We’re just going to figure out the model and screw them. And America was not designed with walls and barriers. We were designed with an entrepreneurial spirit to make the world shine. That’s who we are.

57:50 When I give talks, I say if you want to understand the greatness of America, close your eyes and imagine a world without America. It’s dark. Really dark. Now open your eyes and say, “What makes the world shine when America is shining the brightest?”

58:12 So you’d say, “Well, if that’s true, America reset the world order of trade and properly set the balance where since we’re the best economy, we’re in the best position.” And so if you’re right, Howard, and the world shines brighter when America shines brighter, then even though the world’s paying America, they should be in better shape.

58:38 Korean stock market up 70%. Japan up like 20s or 30s. Europe up more than 15%. All of these up. And you’d say, “Well, I don’t understand. How could they pay us and be up?” Because the world - and stocks are a long-term outcome. And the long-term outcome is if the United States is powerful and strong and creating the greatest weapons in the world and selling us the greatest weapons in the world and protecting us and defending us and building an economy that we can rely upon and trust upon, our companies are going to do great. They’re going to do great.

59:20 This is an excellent point that no one has actually made. The narrative that the media has been trying to paint recently is this is a debasement problem for the US dollar. But I actually think what you said is more accurate, which is what people looked through were the tariffs and saw a level of economic resilience in these other markets that made them very attractive in a way that they weren’t attractive at the current course and speed.

59:48 That’s why Korea did so well, Japan did so well, Europe did so well. It’s why a lot of these base commodities did well because now you’re seeing an increasing of demand because you’re going to see production capacity all over the country. It was a huge change actually. It really resets how capitalism and capital markets will work. I don’t know if it was an intended or unintended consequence, but it’s a very positive consequence.

1:00:18 I want to talk though about what you just said about 2026. You said we will be surprised at the level of focus that you and the president put on fraud and you think there’s a trillion dollars. Can you just double click into what that means, how you’re going to go after it, and is it at the federal level, at the state level, just kind of give us the rough game plan, what you can say.

1:00:43 Sure. So, the president is the federal. So if the federal government gives money to the state and the state gives it out, then we have a dog in the hunt. If it’s their money and they’re giving it out, we don’t really have a dog in the hunt. But we have a dog in almost every hunt because they take the federal money, it goes in, and then they administer welfare. But it comes from us.

1:01:10 So this is - the success we had in pharmaceuticals was the Commerce Department and HHS working together in a way that these departments have never worked together before. He understood my power and I understood his power and together we changed the outcome to incredible success. So that’s how we’re going to look at it. We’re going to have multiple departments working together.

1:01:37 No one has ever looked at if you’re getting Medicaid and Medicare, how much money do you make? No one’s ever compared the two. Really? Yeah. You’re supposed to tell us. It’s the honor system. But the world of America is built - but now with modern technology and then you have a beast like me - the hammer - and probably the guy with the best intuition in the world sitting right over there who’s also a businessman.

1:02:11 And we’d say okay we’re going to build the technology to do this. We are going to build it and everybody’s on board. So you have Treasury, you have HHS, you have Commerce. We’re all working together and we are going to come out with models and methods to seek the fraud out. And not on a limited to Minnesota scale. No, we’re going to go after it big time.

1:02:40 And you have that on one side and then you have the execution of the first year in the second year, which means you have the president saying we have $18 trillion of committed capital. Open your plant. We have spreadsheets. I went over them yesterday. We have spreadsheets of promises. All these people who made these promises, call them. 30 construction projects launched that would never have been launched.

1:03:08 So here’s my view. I told you that I thought in the end of this year we would get to 4% GDP growth. I said it in the first quarter. And 4.3. Now the fourth quarter is going to be a mess because of the shutdown.

1:03:26 Seriously, this is accounting in America. If someone works for the government, they count them as GDP. And you would say - that face exactly make you go what? So wait, stop. So you hire someone in your department, GDP just went up even though they don’t do anything. I thought GDP would be like if you make something, like you do something. Nope.

1:03:52 So, here’s the fun part. When you furlough them on the shutdown, you’re still paying them. That’s the deficit. But they’re not actually working at the government, so they’re not productive. So, they take it away from GDP. And you’d say, “This is actually like the silliest thing in the world. You’re giving the guy the same amount of money. What’s the difference?” But these are the rules.

1:04:18 So our fourth quarter GDP will be a point and a half lower than it otherwise would be for this oddity. Just the furlough. That’s basically - so like the common economists think the fourth quarter growth is going to be a point. Okay. They’re just wrong. I said they were wrong in the third quarter. I said they were wrong in the second quarter. We had 3.8 and then 4.3. We’ll probably be like 2 and a half. But that would have been to your point 4.

1:04:50 Next year with all this construction in the ground - like this Friday I’m flying up to New York to Micron’s groundbreaking of their tens of billions of dollar factory in upstate New York. That’s just another example. Then I’m going to Detroit where they’re doing a huge new build, new auto plant and they’re building their engine plant.

1:05:15 And it’s just fives. You’re going to see fives. Fives in the greatest economy in the world. You’re going to see fives. And people think you can’t - 5% GDP on a base this big is just enormous. We have a $30 trillion economy. So 5% is 1.5 trillion in growth.

1:05:38 And if we cut rates, you’ll see sixes. And people before Donald Trump walked into that office they would not think that’s possible. And what’s six mean? Let’s just put six in context. Six was China at its peak under central planning with a tight control on every aspect of its economy. That was what the world knew is what six looked like in the modern era. And now the alternative version of six will be the president, you, the team in a much more open way.

1:06:10 I’ll be shocked. You would have said it could never happen. I would be shocked. I mean, that’s an incredible - okay, I’ll put it this way. It wouldn’t even be fun for you when we see the fives because they’ll be so soon. They could be this quarter as in the first quarter. So then I’d say, “Well, you have to come back and see me when it’s five.” But then you’ll come back in a couple of months.

1:06:37 And then you’d say, “Howard, I just spoke to you for an hour. I don’t need to speak to you again.” But you’re going to see fives like as in early in 2026. That’s incredible. And then if they cut rates, and that’s the thing. I need a new Fed chair who cuts rates. And if they cut rates, sixes. You’ll see sixes.

1:07:03 And what you’re going to see, what that means is jobs are abundant. Good jobs are abundant. High-paying jobs are abundant. Construction jobs, 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 growth.

1:07:25 See, if we have no growth and I pay you more because you demand more, that’s inflation. But if I’m trying to build a factory because I’m kicking tail and I have to share some of my profits with you to convince you to come to work - well, I’ll give you a perfect example of this. I am the lead investor in a one gigawatt data center project in Arizona. We have to pay electricians between $500,000 and $750,000 a year, which is more than what we pay the engineers that work at the models out of Facebook.

1:07:58 But it’s an example to your point of just the economy has created earnings potential across the board in ways that I’ve never seen in my career. It’s really quite incredible.

1:08:13 The society under Obama, the Obama view of the country, he blew it. He got rid of shop class. When I grew up, you took shop class. There were things to use with your hands. And then we sort of ruled that out in America. Said you got to go to a liberal arts college. You have to end up with $200,000 in debt. And then these people thought, what job am I getting that gets me to pay off my $200,000 in debt?

1:08:45 And then you have Biden jams in inflation, so the price of a house goes up, and then the American dream sort of slips further and further away. And you get Donald Trump saying, “Okay, the way to fix it is I need to get the people working with their hands, 6 million Americans sitting on the sidelines because the jobs are not the right jobs for them. Get them out. Technicians, fix robotics.”

1:09:13 I went out to Arizona to the TSMC plant and I met these guys were pipe fitters. I met a pipe fitter and I said, “So, how’s your job?” He goes, “I play Tetris every day.” He goes, “I’ve got to get these kind of pipes through this kind of thing and this kind of way. They give me this much space and I got to do all this thing.” He goes, “I have the greatest job ever.”

1:09:40 Can I tell you something about that TSMC plant? That’s a 4 nanometer plant. They are at better yields or equivalent yields than the best operating 4 nanometer plant in the world which is in Taiwan. Isn’t that incredible? American technicians are now dollar for dollar as good as what was happening in Taiwan. It’s incredible. Nobody knows this by the way, but it’s incredible.

1:10:08 So TSMC when I walked in there was this CHIPS Act. So the CHIPS Act had $52 billion because we made no chips in America. Semiconductors. By the way, so just as a sort of a fun story, a wafer, these are things, but a wafer is the size of like a pizza you get in a restaurant. It’s like a personal pizza. Small pizza. Yeah. It’s like a 12-inch pizza.

1:10:38 And then what they do is they break it in little chips. And that’s why it’s called the semiconductor chip. They literally chip it. So, the beauty of AI, like these GPUs that Jensen builds from Nvidia, is instead of making 4,000 little chips out of that pizza, they make 10. These are big things. This thing’s the size of a refrigerator.

1:11:05 Like you think of a chip, think of the little teeny thing going in your iPhone. And these things are the size of a refrigerator. And so it’s a different kind of model, but they gave Intel $10 billion.

1:11:23 Actually, let me just stop there because I think one of the things that you did, you basically just put a pause on the CHIPS Act and ripped it apart and restarted it effectively because it was initially under Biden - again just as an outsider looking at it - it was largely giveaways. And I think you flipped it around and you essentially said stop.

1:11:49 My understanding is you actually haven’t - you’ve committed to a lot but you’ve been pretty judicious and disciplined about giving the money out. I think only 6 billion has gone out because there’s a bunch of conditions and you have to actually meet these milestones and the CHIPS Act is very different than how it started. So is that fair?

1:12:12 Yeah. Because the Biden administration viewed the $50 billion as I’ll give you 10%. You build a $16 billion plant, I’ll give you $6 billion. And why does that not work? Why would that not have worked or why was that not working when you came in?

1:12:32 Why would you give $6 billion to TSMC, which is Taiwan Semiconductor Manufacturing Corporation, when their stock is worth a trillion? So what Donald Trump does is says, “Hey, how about this? How about this? I’ll charge you a 100% tariff. How about that?” And then the guy says, “Okay, I’ll build in America.” See, I don’t have to give you six billion.

1:12:58 Like Donald Trump can dissect it in a paragraph. So, what we did is we said to TSMC, “Look, you signed the contract. There’s 20 pages of DEI stuff in it. You need to hire a blind contractor. You have to have trans lesbian engineers. I’m not kidding by the way.”

1:13:25 And so think about the Taiwan Semiconductor Manufacturing Corporation. How many lithography engineers does Taiwan have that are female, let alone what their sexuality choices are? They’ve never had a female. They’re all men. So I said, “Listen, you’re in breach.” Everybody thinks like a Republican will just rip that stuff up. Not this kind of Republican. This kind of Republican reads the contract and says, “You’re in the DEI. You didn’t build a daycare center in the middle of your clean room fab.” Like, you signed that contract. So you’re in breach.

1:14:05 Okay. So how about this? How about I add 100 billion? So instead of building 60 billion, you build 160 billion. And we agreed. So I feel better. And then do you waive the DEI requirements? Yeah. Hey, build another hundred billion. We can rip that stuff up. No problem.

1:14:30 So what happens is you now have a $165 billion plant going in. And I think I’m going to let TSMC announce it, but they are going to get much bigger even from the 165 billion. And this is remember this is a factory that makes the stuff that Nvidia sells for five times higher.

1:14:55 Okay, let’s talk about Nvidia for a second. You did a deal at the end of this year. I don’t think we’ve ever seen a deal like this. And you can tell me if it’s wrong, but you control the export licenses and as you said, Chamath, we don’t want our adversaries to get the most advanced silicon which makes sense.

1:15:18 And then you struck an agreement with Jensen where now I think it’s the H200s which are not quite the most advanced chips but maybe one generation before can go to China. Advanced at what China makes. But in return you got a 25% marketing fee. What do you - kind of a rev share. Tariff. Tariff. Just describe to us the construction of that deal and what it means for these kinds of deals in the future.

1:15:48 So Jensen Wang who runs Nvidia is obviously a businessman of extraordinary capacity. You can’t run a $5 trillion company unless you’re incredibly impressive. So he comes in and I promised him in the beginning when I first met him that I would help him have really easy access to the president because he’s a national treasure. And our great companies are national treasures for America.

1:16:20 So his argument to the president, you could buy it or not, is that if you shut off China entirely, then all of their economics go to their national champion to build new stuff and all their economics go to that company and that helps that company grow.

1:16:42 And that if you give them better than what they have, you don’t have to give them your best. You just have to give them better than what they have. This is his argument. Then they’ll give less to their champion and more to you and it’ll have a positive economic relationship with China and positive for us overall.

1:17:06 Now, there are plenty of people who disagree. But that was Jensen’s argument and that was the discussion, the argument, the debate that we had. And then when that was done and over, then the president said, “And you got to give me 25%.”

1:17:24 So the 25% was a throwaway. But it was like, “Look, if I’m doing all this for you, you still got to give me 25%.” So the way we’re doing it is he has to send the chips to America. We test the chip to make sure that he hasn’t enhanced it in any way.

1:17:45 Because the H20 was oddly enhanced. It had less flops but more memory. In fact, it had more memory than the H100 which one could argue was a little - not everybody knew that. Say it that way. So we test it on the way in. We can charge it a tariff, just regular 25% tariff and then we give export licenses to who he wants and then he sends it to China or whoever he’s selling it to.

1:18:17 So I think the president - this is the president’s deal and my job is to make sure all the smart people are in the room with both opinions. Never let one opinion - people think oh the last person who met Donald Trump. No they don’t. Donald Trump hears so many different views that often he’ll call the person he likes that he’s going to go with the last one before he gives it because that makes sense.

1:18:46 Like if I’m going to say yes to you. I’m saying no to him but I’m saying yes to you. So what a shock. I call him and say no and then I call you and say yes and they’d say, “Oh, he called Chamath last and that’s why.” Yeah.

1:19:02 So that was Jensen did a great job making the case and convincing the president of United States who has a very detailed and nuanced view about China and not everybody agrees with him. But my take on having worked closely - been his friend for 30 years but worked closely with him this year - is he does have the best intuition of anybody I’ve ever met in the whole wide world.

1:19:32 And when he thinks it’s okay and I know he’s had full information and he makes - when you make strong decisions you might disagree. Doesn’t always agree with me. But it’s a strong decision which has deep base thought and balance to it. And he’s done that every time. And it’s amazing. He does play a better game of chess. He just does play a better game of chess.

1:20:03 And that’s why it’s so fun for me because I was very successful in business and in my companies which had 13,000 employees, I was the one up here. And for me to work for somebody the bar is high. It had better be high. And he’s just the most fun to work for.

1:20:27 Do you think that the deals that we’re seeing - so there’s a 25% rev share on the H200s from Nvidia. You were able to get 10% of Intel. There’s a lot of these deals where you could say all these companies that are on the bleeding edge of America, America’s national treasures, they need help that only you or the president, the infrastructure of America can provide. Should America get something in return?

1:20:55 I think the way President Trump thinks about it is that if you can do it on your own, you do it on your own. But if you really need his 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, isn’t there something for the American taxpayer there?

1:21:18 Because if in the end, if we can balance the budget, then he can take care of the people who make less than $150,000 a year and change America. And that’s what he wants to do. So he’s looking for - look why would we give the money to Intel? It was given to Intel, contract signed, given to Intel.

1:21:40 So to turn that around to where America owns 10% of Intel - that can fix - use that money to fix social security. Use that money to reduce our deficit. Use that money to charge less in taxes. Use the money to make America great.

1:22:00 And look, I think if we get rid of the fraud, that’ll save the country a trillion dollars. If you figure out ways to make a trillion dollars, you could reduce our deficit or you could start the process of solving social security.

1:22:18 Not like - the scary part for me is if I say the word social security, it doesn’t matter what you say with the word social security, they assume you’re taking something away from them because every politician who’s ever said social security says I’m going to take something away.

1:22:38 But the answer is if you hit it with outside money and just start hitting it with money that you’ve made out here and you fix it, you take nothing away. And that’s it. If we’re the richest country in the world, if we get rid of the fraud and we can run America smart, we can do it all because we’re the greatest country in the world.

1:23:00 Imagine if you grow 6%. You’re going to fix the deficit. You’re going to fix taxes. You’re going to fix - it’s mathematical. You start to do it. You get full employment. People get paid. I think we can win.

1:23:18 And that’s why I can achieve the goal of being the secretary who has the most fun because I’m in the room where it happens with Donald Trump where he thinks about things. And I was in a meeting yesterday with him where there were like eight advisors sitting around the resolute desk and he’s on that side and they all had this opinion and he had it and he said, “No, no, that’ll have this derivative result and we’re not doing that.”

1:23:47 And everybody in the room was like, “He’s right.” I mean, you got eight guys and women thinking, and he just says it. I mean, he’s great.

1:24:00 I have one final question, which is an audience question. It’s from Brandon L from New York, who asks who is your favorite child?

1:24:12 So, I have four kids. So, the joke in my house was I had the oldest, my son Kyle. I had the youngest, my son Ryan. I have my only daughter who’s my daughter Casey. So my son Brandon would sign his birthday card, “your fourth favorite.” Because he was neither the youngest nor the oldest nor the daughter.

1:24:38 So he would sign “your fourth favorite.” And whenever one of the other kids screwed something up in one of the funniest things you’d ever seen, me and my wife would be sitting in our bedroom and Brandon would come running in and say “third” and he’d run back out. And he was doing this when he was like 12. So it’s hysterical.

1:25:02 So that’s a really funny question. And I have the best wife. I’ve been married 31 years. I love her to death. She’s just a wonderful woman and a spectacular mom and we have great kids, really smart, really capable because great mom, and we’re really close.

1:25:25 So, people ask me like, “Where’d you go on vacation?” I said a simple question. I asked my adult children where they wanted to go, and that’s where we went. Because if I went somewhere else, they wouldn’t go with me. And I want them to be there.

1:25:43 And there was a picture of me with Bobby Kennedy in Aspen where there was absolutely no snow. And so you say, “Well, why did you go?” Said, “Because my adult children are here and that’s where I was.” We’re both on the same page.

1:26:02 So I think if you have - I found the right girl for me and so I have the best family and it lets me do this and lets me be completely committed to the government. And I was very successful in business. I had a company that did more than 10 billion dollars of revenues a year, made lots of money, and I don’t have it anymore.

1:26:28 I was - I used to joke that I was the only commerce secretary who had patents, but I have none because I had to divest all of them. But I understand the patent office. I understand business. Donald Trump understands business.

1:26:47 And we have really impressive people in this cabinet who are fun to work with and you are going to see great things in the second year.

1:27:00 Howard Lutnick, thank you for joining All-In. It was really fun talking. Thank you. All right, besties. I think that was another epic discussion. People love the interviews. I could hear him talk for hours. Absolutely. We crushed your questions in a minute. We are giving people ground truth data to underwrite your own opinion. What do you guys think? That was fun.