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

31:25How about this? So if you suggested I got it right the first time, that would not be true. I got it right. You know, I've always described my business success in life. I always came at it like this, okay? And then this, this, this, sooner or later. Iterate the success. Yes, it's sort of later I got through. 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$100 billion of nuclear plants.

32:11They will pay for it. 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 bondholders. From their domestic bondholders. Right. So they're an LP to you and you're the GP. Exactly the right thing. Yeah. They're an LP. They give us the equity. Yeah. 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. So that means in 30 years, the taxpayers of Japan broke even. And their dividend was a reduced tariff.

32:54That every day they had a lower tariff, they had more employment, they had this and that. And you know what? What's their stock market's up? 20s? Up, not down. Up. So, you know, that's the point, which is it didn't cost their taxpayers money over time. Right now, we, 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.

33:35Yeah, exactly. 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? The only bank the United States of America has, as far as the Secretary of Commerce sees, is called Treasury. 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. Right.

34:17For us to get our house in order, right? That's why the president talks about the external revenue service, right? In this case, you're going to make, you'd say, all right, well, over 20 years, you'd probably make 30 billion a year, right? That's 30 billion a year. You know how much tax we'd have to raise? Yeah. 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 the lowers interest rates drives our economy but most importantly we don't have to pay 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 rateable reduction in income taxes.

35:12Is 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 can? Who paid for no tax on tips, no tax on overtime, no tax on social security? right tariffs tariffs so that's a like that's a down payment right right but that's the idea we should be able to reduce the tax burden from the bottom up yeah right help americans who make less than 150 000 who earn overtime who who own earn tips let's reduce their tax burden right let's help them and that's by the way that's 85 of america it's not like it's a subset 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.

36:09And that means we don't have to take things away from people. 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. 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, give or take, give or take, give or take.

36:56The 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. 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's 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.

37:32What are the big sort of hot button places that you want to - I'll tell you a story about India. So if you remember, so I did the first deal, the UK, and we told the UK that they had to get it done. by two Fridays from now. That 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. And President Trump does deals like a staircase. First stair 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.

38:14They took the chance. They moved quickest. They're first. second up a stair so that sets the floor right and then the next one's got to be higher and then the next one higher and the next one higher the next one so he does things that way because that way it incents you to come to the table right right you could have three countries who are the second deal they all get done the same time right but you know if you want to wait and see how it goes that's at your risk 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.

38:56Okay? So everybody asks the president, who do you think is next? And if you look back at the time, he talks about a variety of countries, but he names India a couple of times, publicly. It's not like a big secret. 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 and right and yeah 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 is as successful as me as a businessman before who's just the table center basically you know 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 yeah okay he's the closer he does the deal so i said you got to have modi it's all set up you have to have modi call the president and they were uncomfortable doing it.

40:08So Modi didn't call. Wow. So that Friday left, middle of the next week, we did Indonesia, the Philippines, right? Vietnam, we announced a whole bunch of deals. Malaysia in that period. So we did these whole bunch of deals, so that's like. That staircase. And they were at, and because we negotiated them and assumed India was gonna 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. Right. And then India calls back and says, oh, okay, we're ready. I said, ready for what? It was like three weeks later, I go, are you ready for the train that left the station three weeks ago?

40:53So what happened is they just, you know, sometimes there's that seesaw and people are on just the wrong side of the seesaw. You know, 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, you know, I'd buy and it would go down. And then I'd sell, it would go up and then the buy would go down and sell. When you're on the right side of the seesaw, you can't lose. You know, you buy, it goes up and then you sell and it goes down and you buy, it goes up and sell, it goes down and you feel like you're the king. 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 and then and then people would call and say you know can i speak to harry they go no he's in a meeting and meanwhile they look up and there i am washing the plant because whatever i did i would get back in there and i touch it, we're going to go the wrong way.

41:54So 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. And then they couldn't get it done. And so what happened is all these other countries kept doing deals and they're just further in the back of the line. 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 negotiate. And they remember, and I remember. And they say, but you agreed. And I said, then. Then. Not now, then. And so that's the problem India will work it out.

42:47but it's just you know there's a lot of countries and and they each have their own deep internal politics and to get something approved by their parliament or their diet or their you know these are deeply complex thing and and we're dealing uh with the world but we've gotten them done You know, we got Europe done, right? We did Japan, then they did Europe, then we did Korea, and we've done country after country after country. 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.

43:39And you can use them to change the trade deficit, but you can also use them to change behavior. We should spend some time talking about drugs and pharmaceutical. Well, this is what I wanted to do. Let's double click into AI and drugs, but let's start with drugs. So you were pretty integrally involved in some of the 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 get done. So everybody who studies pharmaceuticals learns that America is the client, is the consumer, is the payer.

44:24Worldwide. worldwide. We pay all the money. So these drug companies make 75 % of their revenues in America and it's 100 % of their profit. 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. What's your cost? And the drug company says,$100. So they say, we'll pay you$175. You can make$75. 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 it? You're not going to give medicine to your people? No, we can't afford it? No. So eventually the drug company says, ah, fine.

45:08So we're paying a thousand. And they're paying 175 bucks. You know, six times less. And you'd be like, what? and that is how the whole world's drug model was working we're paying a thousand everyone else in the world is paying 175 so donald trump says i want to fix it and i want mfn price you want to charge us most favored nations most favored nations so we're the cheapest price in the world right but you could charge them 500 and then you could charge us 500 fine right 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 a thousand right it's just unfair you're not dictating price in america you're essentially dictating the lower bound price abroad we are dictating fairness fairness like if we're your biggest customer treat us like fairly we're not even saying treat us the best we're saying treat us fairly.

46:12I 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, I don't know, geez. I mean, you just write a letter to all the big drug companies saying, you're going to give us mfn and you like write a stern letter and i'm like okay good luck with that how's this baby gonna work right you know and then so i sit with uh we have this amazing meeting with bobby kennedy and uh and his team and we say look i've got these 232 tariffs i could smash these companies smash because they all make it overseas and export it to us and we're and we're all the money.

47:06So we could charge them any tariff we want. We charge them 500%. So let's do something that's never been done before. Let's literally be a team. Okay? You lead. So Bobby and his team, who were amazing, Dr. Oz, Chris Klopp. I mean, these guys did spectacular job. They led, but I was the hammer, right? From table setter to hammer. It's a hammer. So now I'm the hammer. So I'm like in the background, like hammer. And then like 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 than you sell it to us. Of the countries that have money.

47:53We're not talking about if you sell it to sub-Sahara Africa. We're talking about the big countries, the OECD. Let's say call it the big 10 or the big 20. 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 the hammer mean? I don't know, hundreds of percent tariff starting, I don't know, what do you think, 30 days from now? Like bang. so so you're just there in the corner they just see just i'm like the handsome guy in the back just gonna you know like so if you see me at the meetings i'm like yeah like la la la but if you look at the uh pictures that are put out everybody puts out the picture of bobby signing and me signing right right you say what do you sign harrod i'm signing the uh no hammer rule So the result is Ozempic and Munjara are on Medicaid and Medicare for$149 instead of not on it.

49:10Right. And generally for sale for thousands. Right. So think about it. Instead of generally for sale for thousands, everyone in America can have it for$149. bucks and and that's going to reduce also i mean it's going to change these drugs we had we had drug companies say you know what i'm just going to give it to you one of the drug companies merck so they're going to just give us their number one drug in the world right they're going to give it to medicaid medicare for zero right right so we saved 25 35 billion dollars a year but more importantly, we made drugs accessible to America at a fair price and stop always being the one who pays.

49:59We 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 a big chicken leg you know he's like starving so he looks at the other guy he sees him like i mean the world views us as a giant chicken you know that they should just we're so rich we won't miss it and so they all the trade deals were bad the drug deals were bad the you know you can go chapter and verse 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 right But who's paying for the lottery?

51:06We are. So it's not like, you know, the normal lottery, everybody pays in a dollar and the winner gets X percent of the money. Right. Here, the people win the lottery and we lose. Right. Like it's like a win-lose. And that's like, and you would say, gosh, why would we do that? Yeah. And it's only because Donald Trump is willing to literally challenge. Why are we doing this? Why are we doing that? 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.

51:48Meaning 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 have which is awesome right you change the budget deficit of the country that's 600 billion dollars this year you just you just relentlessly deliver what happens is if you have a businessman in that office and and donald trump has the best intuition of anybody i've ever met i could tell you stories and stories of just like when they said to me uh I don't know, maybe we talked about it last time. What's that flag on the back of those ships?

52:32And 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? And I was like, no. He goes, why is that? 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. Like all the tankers, cargo ships. And why is that? It's a tax scam. it's a flag of convenience right and then what they do is they then so they make all their money on the seas 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 america that's an expense and all their profits are on the high seas where they pay no tax right so what do you think they do then they buy the ports right right It's all a tax scam.

53:19So the president, by intuition, sends us out like he sends me out. He loves to send me out stuff because I just love the stuff and I find it. And we're going to attack. 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. And the system, remember, America had open borders until 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'd die.

54:08What do you want from me? Get a job, take care of yourself or get lost. Right. 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. Right. That's getting it wrong. 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.

54:56And so they wouldn't stay here. They would self-deport and leave. 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, that, then everybody's going to come and just leech off of us and we're going to pay and pay and pay until now in the room on this immigration side you've launched two versions of the trump card i think right there's the million dollar trump card and then the five million dollar card where are those programs and how have they been working so so they're it's out right now trumpcard.gov It's a really nice website.

55:34And what happens is the idea is to stop letting people into the country without a clear benefit to the country. Right? You should come in if you're going to give us a clear benefit to the country. Like it should be black and white. We want you. Yeah. Right. You can help us. Yeah. So the average green card, if you looked for the last five years, The average American makes in the 60s$1 ,000 a year and the average green card recipient made in the 40s. So we are bringing in the bottom quartile. Right. 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 on getting stuff from the government.

56:25because they were all coming to get stuff from the government. Right. 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 spent$15 ,000 on the greatest vet we've ever done. And then you come in and you're going to be top quarter, maybe top desk high. Right. But you're going to help America be better. Have you announced how many people have applied or the first batches yet that have been granted this?

57:07No, the president, the president, the first week, put out that we had sold a billion dollars worth. In the first week? Yeah. Oh, wow. So, but that's a, but there's a process and that this process is going along fixing the immigration system, right? Not letting people come in by lottery, selecting who they are, not bringing in people who would take a trainee job, right? People who graduate universities around the world and people who graduates - Fixing the H-1B. Yeah. I mean, 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.

57:54Hire from the universities of America. Don't hire from the universities of the world. It just doesn't make sense. 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, you know, America was born with, you know, 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. 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.

58:37We live in a crap hole. Let's get out of here. And these morons are going to let us have a BMW. 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. 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 yeah really dark now open your eyes and say what makes the world shine when america is shining the bright so you'd say well if that's true america reset the world order of trade right 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 bright then even though the world's paying america they should be in better shape yeah korean stock market of 70 percent japan up like 20s or 30s Europe up more than 15, right?

1:00:03All of these up. And you'd say, well, I don't understand. How could they pay us and be up? Because the world, and you know, stocks are a long-term outcome. That's right. Right? 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. 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.

1:00:40But I actually think what you said is more accurate, which is what people look 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 be. 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.

1:01:09I don't know if it was an intended consequence, but it's a very positive consequence. 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? Sure. So the president is the federal, right? So if the federal government gives money to the state, and the state gives it out, then we have a dog in the hunt.

1:01:49Right. Okay? 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, you know, and then they administer welfare. But it comes from us. 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. That 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.

1:02:37No 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. Yeah, you're supposed to tell us. But if you're a fraudster. It's the honor system. Yeah. But the world of America is built, but now with modern technology. Right. And then you have a beast like me. Right. Right? The hammer. And probably the guy with the best intuition in the world sitting right over there was also a businessman. Right. And, you know, 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.

1:03:24So you have a THS, you have HHS, you have commerce, right? 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. Oh no, we're going to go after it big time, right? And you have, so you have that on one side, and then you have the execution of the first year and the second, which means you have the president saying we have$18 trillion of committed capital. Okay. Open your plan. We have spreadsheets. I went over them yesterday. We have spreadsheets of promises. All these people who made these promises. Okay.

1:04:14Call them 30 construction projects. launched that would never have been launched. 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. Yeah. And 4.3. Now the fourth quarter is going to be a mess because of the shutdown. Seriously, this is accounting in America. If someone works for the government, they count them as GDP. And you would say, right, that face, exactly make. You go, what? So let's get, wait, stop, stop, stop. So you hire someone in your department. GDP just went up. Even though they don't do anything.

1:05:01I thought GDP would be like if you make a tank. Productivity, something. Like you do something. Nope. So here's the fun part. When you furlough them on the shutdown, right? 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 G 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 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 a sort of basis like like the common economists think the fourth quarter growth is going to be a point.

1:05:50Okay? They're just like, wrong. 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 4.3. It'll probably be like two and a half. But that would have been to your point four. Four. Right. 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 right then i'm going to detroit where they're doing a huge you know new build a new new auto plant and they're building their engine plant and it's just fives you're going to see fives in the greatest economy in the world you're going to see five.

1:06:39And people think you can't, you can't. I mean, 5 % GDP on a base this big is just, it's enormous. Right. We have a$30 trillion, so 5 % is 1.5 trillion in growth. And if we cut rates, you'll see six. And people do not, would never, before Donald Trump walked into that office, they would, don't think that's possible. And what 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.

1:07:25I'll be shocked. You would have said it could never happen. I would be shocked. I mean, that's an incredible - You're going to put it this way. It wouldn't even be fun for you when we see the five. Yeah. 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 through five. But then you'll come back in a couple of months. 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 26. That's incredible. And then if they cut rates, and that's the thing.

1:07:52I need a new Fed chair who cuts rates. And if they cut rates. Sixes. You'll see sixes. And what you're going to see, what that means is jobs are abundant. yeah good jobs are abundant high paying jobs are abundant right 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 six percent gdp growth see if if we have no growth and i pay you more because you demand more that's inflation that's right but if i'm like 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.

1:08:35Well, 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 at a Facebook. 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. The society under Obama, the Obama view of the country, he blew it, right? He got rid of shop class. When I grew up, you took shop class. There were things to use with your hands.

1:09:19And 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, right? And then these people thought, like, what job am I getting that gets me to pay off my$200 ,000 in debt? 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. six million Americans sitting on the sidelines because the jobs are not the right jobs for them get them out technicians fix robotics yeah right I had I went out to Arizona to the TSMC plant and I met the uh these guys were pipe fitters I met a pipe fitter and I said so how's the job he goes I play Tetris every day he goes I've got to get these kind of pipes through this kind of thing in this kind of way.

1:10:21They give me this much space and I got to do all this thing. He goes, I have the greatest job ever. Can I tell you something about that TSMC plant? That's a four nanometer plant. They are at better yields or equivalent yields than the best operating four nanometer plant in the world, which is in China. Isn't that incredible? American technicians are now dollar for dollar as good as what was happening in China. It's incredible. Nobody knows this, by the way, but it's incredible. So TSMC, when I walked in, there was this Chips Act. Okay. So the Chips Act had$52 billion because we make no chips in America.

1:10:59Semiconductors. By the way, so just as a sort of a fun story, a wafer, these are things you know, but a wafer is the size of like a pizza you get in a restaurant. Yeah. It's like a personal pizza. Like a small pizza, yeah, exactly. Yeah, it's like a 12-inch pizza. Yeah. Okay. And then what they do is they break it in little chips. And that's why it's called a semiconductor chip. They literally like chip it, right? 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. Like this thing's the size of a refrigerator.

1:11:39Like you think of a chip, think of a little teeny thing going in your iPhone, right? and these things are the size of a refrigerator right and um so it's it's a different kind of model but you know they had they gave intel 10 billion dollars gave g yeah 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 And again, just as an outsider looking at it, it was largely giveaways. Giveaways. And I think you flipped it around and you essentially said, stop.

1:12:16My 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? Yeah, because the Biden administration viewed the$50 billion as, I'll give you 10%. You build a$60 billion plant, I'll give you$6 billion. And why does that not work? Like, why would that not have worked? Or why was that not working when you came in? Why would you give$6 billion to TSMC, which is Taiwan Semiconductor Manufacturing Corporation, when their stock is worth a trillion?

1:13:02Right. So what Donald Trump does is says, hey, hey, how about this? How about this? I'll charge you 100 % tariff. How about that? And then the guy says, okay, I'll build in America. See, I don't have to give you$6 billion. Like, you know, Donald Trump can dissect it. Yeah. Right, in a paragraph. Yeah. In a paragraph. Right. So what we did is we said to TSMC, look, you signed the contract. There's 20 pages of DEI stuff. you need to hire blind stuff oh you have to hire a blind contractor you have to have like you know trans lesbian engineers i'm not kidding by the way and you know so think about the taiwan semiconductor manufacturing corporation right how many lithography engineers does taiwan have that are female let alone what their sexuality choices are right they've never had a female they're all men.

1:14:01So I said, listen, you're in breach. Right? 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 know, 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. Okay. So how about this? How about add 100 billion so instead of building 60 billion you build 160 billion right and we agree so i feel better and then do you waive the dei requirements yeah yeah hey build another 100 billion we can rip that stuff up no problem so what happens is you now have a 165 billion dollar 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.

1:14:57And remember, this is a factory that makes the stuff that NVIDIA sells for five times higher. 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 and then you struck an agreement with jensen we're now i think it's the h200s which are not quite the most advanced chips but maybe one generation before they're more advanced than what china makes right but in return you got a 25 percent marketing fee what do you kind of rev share or tariff.

1:15:42Just describe to us the construction of that deal and what it means for these kinds of deals in the future. So Jensen Wang, who runs NVIDIA, is obviously a businessman of extraordinary capacity. Can't run a$5 trillion company unless you're like - Incredibly impressive. 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 yeah right and and our great companies are national treasures for america so so he his argument to the president buy it or not is that if you shut off china entirely then all of their natural all of their economics go to their national champion to build new stuff.

1:16:40And all their economics go to that company and that helps that company grow. 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. Now, there are plenty of people who disagree, right? 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 so the 25 was a throw away right 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 okay because the h20 was oddly enhanced you know that it had yeah it had less flops but more yeah memory in fact it had more memory than the h100 which one could argue was a little you know not everybody knew that let's 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 and then he sends it to china he sends it you know whoever he's selling it so i think we the president this is the president's deal and and my job is to make sure all the smart people are in the room with with both opinions okay 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 like if I'm going to say yes to you yeah right 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 shabbat last and that's what yeah yeah so that was you know jensen did a great job making the case and convincing the president united states who has a very very detailed and nuanced view about china and not everybody agrees with him right but you know my take on having worked closely been his friend for 30 years but been worked closely with him this year is He does have the best intuition of anybody I've ever met in the whole wide world.

1:19:38And when he thinks it's okay, and I know he's had full information, right? And he makes really strong decisions. You might disagree. He 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 you know every time and it's it's amazing he he does play a better game of chess he just does play a better game of chess and that's why it's so fun for me because you know i i was very successful in business and and in my companies which had i don't know 13 000 employees like i was the one up here yeah and for me to work for somebody the bar is high The bar had better be high, and he's just the most fun to work for.

1:20:33Do 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, I think, 10 % of Intel? 10%. 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 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 right right because if in the end if we can balance the budget then 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 sign given to intel so to turn that around to where america owns 10 of intel right 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 right and you know look i think if we get rid of the fraud that'll save the country a trillion dollars right 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 and 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 yeah 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 right and that's 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 imagine if you grow six percent you're going to fix the deficit you're going to fix taxes you're going to fix it's mathematical no it's mathematical you start to do it you get full employment you people get paid that's i think we can win and uh and that's why i i can achieve the goal of being the secretary who has the most fun because i'm in the room where it happens right with donald trump where he thinks about things and he thinks about them.

1:23:38And 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. And everybody in the room was like, yeah, he's right. I mean, you got eight guys saying, you know, guys and women thinking, you know, and he just says that. i mean he's he's he's great great 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 so i have four kids okay so the joke in my house was i had the oldest it's 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.

1:24:47So, he would sign your fourth favorite. And whenever one of the other kids screwed something up, and one of the funniest things you've ever seen, my wife and I 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. You know, so it's hysterical. So that's a really funny question. And, you know, I have the best wife. She's both. 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, you know, great mom, great mom.

1:25:32And we're really close. 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. And there was a picture of me with Bobby Kennedy and Aspen where there was absolutely no snow. And so you say, well, why did you go? Because my adult children are here. And that's where I was. We both were on the same. You're on the same train. Same page. 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.

1:26:17And I was very successful in business. I had whatever company that did more than$10 billion of revenues a year, made lots of money and I don't have it anymore. 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. And we have really, really impressive people in this cabinet who are fun to work with. And you are going to see great things in the second year. Howard Lutnick, thank you for joining Olin. It was really fun talking. Thank you.

1:27:00All 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'd you guys say? That was fun. That was great. I'm going all in.