All-In PodcastTrump's Big Week: Middle East Trip, China Deal, Pharma EO, "Big, Beautiful Bill" with Ben Shapiro
EVERY SPOKEN WORD
150 min read · 30,032 words- 0:00 – 1:53
The Besties welcome Ben Shapiro!
- JCJason Calacanis
All right, everybody. Today on the All-In Podcast, we're joined by our friend Ben Shapiro, and we have a full docket, including Trump's trip to the Middle East, the executive order on pharma benefits. We talk a little bit about mock meat being banned in Montana, and Friedberg is really upset. He drops a disgraciada on the tax bill being supported by Republicans. All that and more on the number one podcast in the world, the All-In Podcast. Stick with us.
- CPChamath Palihapitiya
One thing I'm trying to figure out. Do Daily Mail stories actually end? Because-
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
... I've scrolled up, like, seven times-
- JCJason Calacanis
No, no, no.
- CPChamath Palihapitiya
... and then eight times-
- JCJason Calacanis
The Daily Mail-
- CPChamath Palihapitiya
They never end.
- JCJason Calacanis
Those guys are like the methamphetamine of clicks. It's like click, crack.
- CPChamath Palihapitiya
Yeah, they're like, "One more paragraph."
- JCJason Calacanis
Every time I see a Daily Mail article, I'm like, "Okay, do I have 15 minutes here?" Because I'm gonna-
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
... click on one, I'm gonna look at the photos-
- CPChamath Palihapitiya
Absolutely.
- JCJason Calacanis
... then I'm gonna go to the right rail. I'm gonna click on-
- CPChamath Palihapitiya
Oh, you're on the right rail.
- JCJason Calacanis
... nine other articles.
- CPChamath Palihapitiya
See, that's disgraciada.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
When you go on the right rail, you're a true degenerate.
- JCJason Calacanis
Oh, I love it. Yeah.
- CPChamath Palihapitiya
Stay off the right rail of The Daily Mail. (laughs)
- DSDavid Sacks
That'll keep you on the carousel for hours.
- CPChamath Palihapitiya
Oh my God.
- DSDavid Sacks
They call it the carousel.
- BSBen Shapiro
My favorite Daily Mail story. One time that Jared and Ivanka were, were over at our house and the paparazzi were, were following them around. They were like, "Can you give us a tour of the area?" So we drove them outside for a hot second, and the paparazzi immediately captured a picture of them on the back of our golf cart, because we're in Florida, and me and my son in the front. And the Daily Mail, it was the Daily Mail paparazzi, and so the headline was, "Jared, Ivanka, Unnamed Driver, and Small Boy."
- JCJason Calacanis
(laughs)
- DSDavid Sacks
Nick, Nick 5-
- JCJason Calacanis
I'm trying to find that picture immediately. (laughs)
- DSDavid Sacks
And cut it in.
- 1:53 – 7:58
A Bestie apology to Phil Hellmuth, All-In Poker Tournament
- NANarrator
- JCJason Calacanis
If you want to come to our next event, it's the All-In Summit in Los Angeles. Fourth year for All-In Summit. Go to allin.com/events to apply. Hold on one second. Let me do the intro properly.
- DSDavid Sacks
(laughs) Yes.
- CPChamath Palihapitiya
Now I have to do an apology.
- DSDavid Sacks
Ben, this is gonna be so good right now. You're gonna feel so uncomfortable. It's gonna be amazing. Go ahead.
- JCJason Calacanis
It's gonna be great.
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
So, look, Ben has a hard out in an hour and 40 minutes, so we're gonna get the show started. However, Ben, I, we need to take a pause. Jason will explain what happened last week.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
He is gonna issue a formal apology. If that formal apology is not good enough, I will step in.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Over to you, Jason.
- CPChamath Palihapitiya
Okay. (sighs) Now, we the members of the-
- DSDavid Sacks
(laughs) He's so uncomfortable.
- CPChamath Palihapitiya
... All-In Podcast, including Chamath Palihapitiya and myself, Jason Calacanis, would like to formally and respectfully apologize to poker legend Phil Hellmuth for our previous comments about his relationship with Hollywood actor Timothee Chalamet and the Los Angeles celebrity community more generally. On a previous episode of this podcast, a number of inaccurate, potentially illegally actionable statements were made by the host regarding Mr. Hellmuth. It was strongly implied on this program that Mr. Hellmuth was not acquainted with Mr. Chalamet, and it was further suggested that he had harassed and manhandled the Oscar-nominated performer during a social event in Miami, Florida. This was a flagrant misrepresentation of the facts, for which we are sorry. We here at All-In are committed to journalistic responsibility and integrity, and we hope to use this time to correct the record. In fact, as a noted bon vivant and publicly visible representative of the gaming community, Mr. Hellmuth is acquainted with many celebrities from the worlds of film, television, athletics, business modeling, finance, and beyond. The list of celeb- celebrity friends is far too vast to list here in its entirety-
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
... but we have prepared this section we feel demonstrates how his overwhelming popularity among this demographic. Matt Damon, Steve Martin-
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
... Charles Barkley, Bill Clinton, Khloe Kardashian, Mr. Beast, the guy from Billions, Tiger Woods, Mario Lopez, Drake, and of course, Jay-Z. Once again, we here at All-In regret the error, we should publicly apologize to Mr. Hellmuth and recommit ourselves to truth and accuracy in reporting. Thank you.
- JCJason Calacanis
Jason, that was great. I would just like to add a couple things.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Phil is my best friend, has been for a very long time. I love him. He does have a lot of friends and he opens his Rolodex to us. And so, to the extent that Phil was hurt, 'cause he was a little bit hurt last week-
- CPChamath Palihapitiya
Mm-hmm.
- JCJason Calacanis
... um, 'cause we were ribbing him. We rib him a lot. We make jokes in the group chat a lot, but it's because we enjoy it. He enjoys it, but I think-
- CPChamath Palihapitiya
Yes.
- JCJason Calacanis
... the way that we said it really hurt his feelings. So, Philly, I love you. We love you.
- DSDavid Sacks
We love you, Phil. We're sorry.
- JCJason Calacanis
Sorry, Filipino.
- CPChamath Palihapitiya
And I'm sorry specifically-
- DSDavid Sacks
Sorry, bro.
- 7:58 – 35:18
Trump's majorly consequential Middle East trip: Saudi, Qatar, Iran, and his vision for a "New Middle East"
- CPChamath Palihapitiya
As everybody knows, Trump was in the Middle East. He secured a huge investment from the Saudis, $600 billion, $140 billion for a defense partnership, and MBS said he wants to make it a trillion. Bunch of high-profile CEOs joined Trump, including friends of the show, Elon and, of course, uh, Darrah from Uber, Andy Jassy from Amazon. Who else was there? Alex Karp, Jensen, tons of people, including our, uh, fourth bestie here, David Sacks was there. He also closed a $200 billion deal with Qatar, or Qatár, which includes $96 billion from Boeing to send 160 planes there with an option of 50 more, and he removed sanctions against Syria, a little controversial, we'll get into that, to, quote, "give them a chance at greatness." He gave a speech at a Saudi-US investment forum in Riyadh where he powerfully outlined his vision for a new Middle East, basically rejecting 20 years of American interventions and forever wars, and, uh, he gave big credit to a, quote, "new generation of leaders," including MBS, for building better societies. Ben, what do you think here? What was your take on the trip? Is this the best Trump? Of all the versions of Trump, this did seem to me to be the best version. He seems really comfortable with this category of leader in this region in particular. What were your thoughts?
- BSBen Shapiro
Oh, for sure. I mean, there's no question about that, right? I mean, he likes MBS. Uh, he obviously likes the, the Emir of Qatar. Uh, he likes the, the folks in, in UAE. Uh, they... We've known that for a while, and he's, he's really signaling a, a shift away from the Obama-Biden policy toward a lot of these places, where Biden liked to say the word democracy and then immediately divide off from Saudi Arabia on the basis of that and chide MBS and all this kind of stuff and then try to cut a deal with Iran, for example, at the same exact time, which of course pisses off the Saudis. Yeah, Trump is going over there, and he's in deal-making mode, and you can see he's in deal-making mode. And his entire sort of approach to the Middle East is what he said in the speech, commerce above chaos, right? Let's do some business here. And he understands that there are a lot of people in KSA, uh, Kingdom of Saudi Arabia and, and also in Qatar, UAE as well who are really looking to do business, and I think there are a bunch of strategic aspects of this that are really good. One of them obviously is driving these places away from China. And the more business ties you have with places like Saudi Arabia or Bahrain, UAE, Qatar, the, the further away they're going to get from China. I think you do have to be careful with Qatar in particular which has some divided priorities, shall we say. When it comes to terrorism, obviously, Qatar... The, the case they will make to sort of steel man what, what Qatar says about itself is that they have to have good relations with terrorists so that the West can talk with the terrorists on occasion. Uh, to, to not steel man the case, they gave $2 billion to Hamas over the course (laughs) of the last several years and have funded the American university systems to the tune of $6.3 billion. For a country that has a grand total of 2.6 million citizens, it's smaller than the state of Connecticut in terms of its citizenship. It spends something like two-thirds what China spends on lobbying, which seems, you know, pretty weird. But with that said, the idea of bringing dollars into the United States, combining on things like AI, so what David Sacks has been working on over there, like that stuff is all really, really good. The other warning that I'd issue to, to President Trump is just make sure that, that you have strings attached too, meaning clearly there are strings attached from the other side when you're talking about Qatar, so also the United States should have strings attached. So you mentioned Syria there. If you're talking about, you know, getting rid of the sanctions on Syria, there's an argument to be made. Obviously, Erdoğan in, in Turkey would love that because basically the, the, the leader of, of Syria now, uh, al-Juhlani, he changed his name. He's kind of like the, the prince of terrorists, right? He... Like, he- he's the artist formerly known as al-Juhlani, now he's Al-Sharaa, I think he changed his name to. He was Al-Qaeda, then he was ISIS, then he's HDS. He basically works for the Turks. And so obviously the Turks would love for al-Juhlani to have sanctions removed. That's fine. I mean, I think there's a case to be made for it, but you have to make sure that he actually delivers on the other end of that, which would be getting rid of the terrorists in his country.
- CPChamath Palihapitiya
What do you think, Ben, about Qatar, Qatar... Uh, for people it's, it's the same word, just said differently here in the West, uh, and in their country. Um, do you think we should have deep ties to them, and is the steel man argument that their relationship with Hamas and the Muslim Brotherhood acceptable to you, Ben Shapiro, or do you think-We should hold the line with them and say, "Hey, you got to cut off these relationships if you want to have a relationship with the United States."
- BSBen Shapiro
I mean, it seems to me that we have a lot more leverage in, in the latter situation. And, and Qatar has obviously been paying some $8 billion to have this airbase on its own territory, but then puts restrictions on how the United States can use that sort of airbase. That airbase was previously located in Saudi.
- CPChamath Palihapitiya
Mm-hmm.
- BSBen Shapiro
And, and so, uh, you know, it's, it's my perspective that after October 7th, for example, the United States, under Joe Biden, should have gone to Qatar, which, which obviously has a deep relationship with Hamas, as proven by the release of that American hostage while President Trump was in the Middle East, which was done at the behest of Qatar, that, that probably the United States should have gone to Qatar and said, "Listen, the airbase goes away unless all the hostages come out and the Hamas leadership goes into exile, and you avoid the entire war." So, the- there is leverage that can be exerted. Uh, I'm, I'm not sure that the leverage is being properly exerted on Qatar. Let's put it this way. I'm much more enthusiastic about the ties that President Trump is fostering with Saudi and UAE than I am the ties that he's fostering with Qatar.
- CPChamath Palihapitiya
All right.
- BSBen Shapiro
I mean, back in 2017, there was nearly a war between Saudi and UAE and Qatar.
- CPChamath Palihapitiya
Yeah.
- BSBen Shapiro
I mean, that's how bad the relations were back in 2017. And President Trump was on the Saudi-UAE side of that. So, you know, moving, yeah, let, let, let's just say trust but verify, I think, would be a much better strategy than just trust. Here's some stuff. We'll hope that you, you give us back on the back end.
- CPChamath Palihapitiya
Chamath, let's go to the business side here. Uh, Trump making a lot of deals. A little bit of a brouhaha over a $400 million plane given to Trump. Uh, I'm not sure how relevant that is, or if he's even accepted it personally, and, and I'm sure you've, you've got some thoughts on that. But what did we see there? I, I saw Sandeep, our friend, uh, from Grok, one of your investments was there. We're seeing a level of investment and collaboration between Saudi, UAE, and America, and the West that, hey, let's face it, we haven't ever seen. And they do seem to be leaning more towards, I won't say democracy, but a lot of social reforms, and, uh, a lot of women, uh, w- was pointed out by David Sacks, uh, in the business community there. I've, I've made a couple trips there. It seems to have changed on a human rights basis more in the last three or four years than in the last, I guess, 20. So, what's your take generally on this position Ben has of, "Hey, better they be doing business with us, and let's build and foster these relationships, as opposed to have them fall into the arms of Russia, North Korea, or China"?
- JCJason Calacanis
Let's just go do a little cleanup on a couple of these things, and I'll give you my take.
- CPChamath Palihapitiya
Sure.
- JCJason Calacanis
First thing is, we announced almost $2 billion deal, 1.7, I think, was, is what it was, for-
- CPChamath Palihapitiya
This is Grok did a deal.
- JCJason Calacanis
For... Yeah, yeah, for AI inference. We're starting to build some enormous data centers in Saudi. I'll get to why Saudi is a critical place to do that. But they've been exceptional partners. We are the only inference company in the world with an export license from the United States to do this. So yeah, it was great. That's why Sunny was there, and Jonathan Ross, our founder and CEO. So that was, that was really big for us. This has been company that Jonathan and I got off the ground 10 years ago. It's been a long, long slog. So yeah, there's a lot of commercial activity that happened there. Our friend, Brian Uko, who was just announced as the head of the commercial plane development group at Boeing, who's making all the next-generation planes, Boeing was there. Kelly Ortberg, they announced a $160 billion deal for Boeings, and a bunch of other stuff. Elon announced that Saudi allows Starlink now for maritime and aircraft usage. He also announced robo-taxis are coming to Saudi. So, the business community, I think, was quite central to this trip, which is cool. With respect to the plane, just to do some cleanup, this is a gift that is being handled between the Department of Defense and the Department of Defense of Qatar. If and when that plane does get transferred over, it will then be scanned and retrofitted to military-grade spec that then can be used by the then-sitting president of the United States. And while people want to be up in arms, just to be clear, this has happened, and Qatar specifically has done this multiple other occasions. You may dispute the countries, you may not like the fact that it's happened, but they've, they've given a plane as a gift to the leader of Iraq, to the then-sitting leader of Turkey, to the then-sitting leader, I believe, of Yemen. So, there are customs, I guess. And again, who am I to judge these customs? But that s- to us may seem excessive or untoward, or maybe an attempt at graft. But to them, it's just actually a sign of deep respect or relationship-building. I think that we should not over-judge this thing and let the DoD do their job, and it's a gift to the United States of America and move on. I don't think it's a particularly big deal. What is the big deal? Here is what Trump did that I think is historic. I think the most important thing to recognize is that we, America, has been a global hegemon since World War II. But I think that what we did was we took our eye off the ball, and over the last 20 years, and particularly the last 17, we have seen China slowly erode our global influence through an initiative that they, frankly, were very open and honest about and branded called Belt and Road. And in Belt and Road 1.0, what China did was use the balance sheet of China to invest incredibly aggressively and thoughtfully in all these critical geographies of the world, Southeast Asia, the Middle East, and Africa. Specifically in the Middle East, and specifically between Saudi and Qatar, China, I think, has invested about $200 billion over the last 15 years. What does that do? It allows them to exert influence and economic cooperation, hard power and soft power, right?In one week, the sitting president of the United States announced $2 trillion of investment from those countries into the United States. What does that effectively do? I think what that effectively does is say that the Middle East is turning a page, that they are beyond these regional conflicts, that they wanna thrive as a society, and that they are 100% aligned with the United States. How do you know that? Because I don't think that there's another $2 trillion of deals to be done with any other country other than America. That's number one. And then number two, the reciprocation of how American companies are investing in that region is to the tune of several hundred billion dollars. Now, why is that region critical? It's critical for two things. The first is that when you draw 1,000-mile radius around Saudi Arabia, you touch four billion human beings. Four. Half the global population is within a 1,000-mile radius of Saudi. And so if you can establish cooperation and strategic alignment with that area, it is an incredibly important thing to do. The Saudi coastline, as an example, is thousands and thousands of miles. These are all these huge strategic things that we've known in the context of other conflicts and other geopolitical things that we've done for decades, but what Trump basically did was clean the slate. He wiped the floor with all this neocon establishment nonsense. That's what his speech did, which we can talk about in a second, but he created and forged an economic alliance that I think is going to be very difficult for any other country to undo. That is what I saw. $2 trillion. That is an enormous bet for a country to make on, with another country, and I think the fact that he did that with Saudi and Qatar and UAE speaks a lot to a really important strategy.
- CPChamath Palihapitiya
Freeberg, your thoughts on this trip and the growing and deepening relationship between UAE, Saudi, and the United States, and apparently Qatar as well?
- DFDavid Friedberg
I think the biggest moment was the speech that Trump gave. It underscored, I think, a really important narrative shift for me. This was a powerful embrace of Saudi, Qatar, of their choices, their way of life, their way of being, basically showing, I would say, respect to those peoples without judgment, which I think is quite different from leadership of the past. I'll just highlight, the mainstream media narrative is, "Oh my gosh, Trump goes to Russia, Trump goes to China, he goes to North Korea, he goes to Saudi. He embraces dictators." So the narrative has been that these individuals in leadership positions in these countries are dictators, and Trump embraces dictators. He loves Xi, he loves Putin, he loves Kim Jong-un, he loves MBS. That's a bad thing because the liberal view, and I would say largely the American view in the past, has been that there's right and there's wrong. There's our way of governing, and then there's the other way of governing, and the other way of governing is always wrong, that our form of American democracy is the only model that is right, and all the others have to be wrong. And fundamentally, that's a colonial mindset is what he's highlighting in this speech. He's saying that the point of view that all others are wrong means that they should come a- around to our point of view, our model of democracy, our model of governing. And in the speech, he basically underscored that that's not really the case anymore. We are no longer going to be colonizers where we are going to enforce our view of government on the rest of the world and say, "This is the only good path," but there are other paths and we can respect them. We can work together so long as we aren't harming one another, so long as terrorism goes away, which he underscored in his speech has gone away. And by the way, I'm not trying to highlight or kind of prop Trump up for the speech itself, but I, I, I do think that this underscores a shift in the political viewpoint that has now come to power in America that, you know, we are no longer gonna have this kind of moral or sociopolitical framework that says it's our way or the highway, but we are now going to go to folks like Xi, like North Korea, like China and say, "We can respect your way of living, we can respect your way of governing, and we can have partnership and continue to build a world together without saying that if you don't follow our path, we're never gonna be true partners." So for me, the biggest thing that came out of this whole visit was that shift in narrative that I think really is different than what we've seen in the past and it counters a lot of how the mainstream media has kind of, you know, framed his, quote, "embrace" of, you know, differing ways of governance.
- CPChamath Palihapitiya
Ben, this was obviously a Republican position as well. You know, just we're going to have a hard line on human rights and democracy, and in fact, the entire Republican position in terms of... and globalists, Clinton too, was, "Hey, let's embrace China and we will lean them towards democracy." That obviously didn't happen. They did build a vibrant economy and took 400, 500 million people out of poverty into a middle class, but here we're seeing something different. You know, I've, I've spent a lot of time in the region, maybe four or five trips in the last couple years. Last couple times I was there, women doing business, dancing, music, and now there's alcohol in the kingdom in some select locations. There's a casino coming to UAE. We're actually seeing maybe this strategy of less judgment, more engagement actually result in more modernization. So what's your take on this?
- BSBen Shapiro
I mean, I think that one, one of the things that's happened in the media coverage of President Trump's speech is, is this sort of false binary that isn't really what's going on. So it was sort of posited as...... neoconism versus isolationism, and he mentioned both of those sorts of concepts in, in his speech. But the reality is that I think we should be careful about how we define these terms. What we really mean is that Wilsonian interventionism has been completely rejected by the American people and by President Trump.
- CPChamath Palihapitiya
Hundred percent.
- BSBen Shapiro
And President Trump is, is saying that we are not gonna go into these... Like to pretend that President Trump is being isolationist is obviously not true. I mean, he's literally cutting trillion-dollar deals with foreign countries and traveling there and making common bonds with them. It's the opposite of isolationism in a lot of ways. It's a realism, right? He's a foreign policy realist who wants to make deals where he can make deals, and he wants to make the best deal for America.
- CPChamath Palihapitiya
Y- You're correct. It's the exact opposite of isolation if they're doing projects, you know, in the Trump family and the plane. Th- this is the opposite of isolationism. (laughs)
- BSBen Shapiro
Right, exactly. And so I think that-
- CPChamath Palihapitiya
Yeah.
- BSBen Shapiro
... that all the debates that are currently happening within sort of the Republican ecosystem are sort of which version of realism are we pursuing, right? There, there's a more hawkish version of realism that suggests that you oughta be more skeptical. I mean, I think that's where I am of, of, you know, what you want from these countries in addition to the money. And then there's a sort of more dovish realism that says, you know, basically as long as the deals go forward, maybe no strings attached. And that's a, that's an interesting debate and, and it depends on sort of what levels of trust you have in various countries. And again, I think it differs country to country in terms of what they're asking of you.
- CPChamath Palihapitiya
How would you measure success?
- JCJason Calacanis
And Ben, I wanna ... Ben, I wanna build on what you're saying and just ask a question because I f- I completely agree that, that that rejection has all of these downstream consequences. The most interesting consequence for me, but I would just like your opinion on this, is Trump goes there, cuts all these deals, announces all of it. There's just an incredible show of force, frankly, right? Economic force and political alignment. And then within one or two days, Iran caves. Now we don't know what the final contours of that deal are gonna look like, but that also has incredibly important implications to the safety and security not just of that region, but for everybody. I don't know what you thought about just how quickly it seemed-
- BSBen Shapiro
Yeah, I mean again, it kind-
- JCJason Calacanis
... that there was a capitulation there.
- 35:18 – 46:33
US-China deal: is the tide turning on tariffs?
- CPChamath Palihapitiya
to be in. Let's talk about another win. It was a pretty great week objectively for Trump. On Sunday, Treasury Secretary Besant announced a trade deal with China in Geneva. The details were basically, here we go, another pause. Tariffs will go down from 145% to 30%. Maybe that's manageable. China's cutting their tariffs for the US from 125 to 10%. And they're gonna end this de minimis rule, also known as the (laughs) like garbage fashion rule, Temu, Shein, all that kind of stuff, when they dropship you stuff that's under, I think the number is 800 or so. The market loved the news.
- JCJason Calacanis
Don't. Don't. Make America dress well again. Don't do it.
- CPChamath Palihapitiya
(laughs) I think this is like an important part of this is like this, you know, ridiculous garbage fashion. I hate it. The market was up massively, but, you know, the Dow and the NASDAQ are basically, eh, flat to slightly negative. Our partners over at Polymarket, you know, have a nice market on the chances of a US recession. That peaked at 66% during the...... Liberation Day chaos fallout and, hey, here we go, now it's 38%. So we're kind of, uh, maybe cleaning up the chaos. He shook the globe, uh, (laughs) the economic globe, Friedberg, and now maybe, as I think a lot of people predicted, he found an exit ramp. Maybe that was the plan all along, maybe it's 4D chess, maybe he's reacting to the market, maybe all that doesn't matter, but here we are. Dave, Friedberg, when we look back on this whole trade Trump tariff turmoil, what are we gonna look back on this a year from now and think? Was it just a distraction or is it actually gonna create a trillion dollars in tariff revenue, and we're gonna get rid of 150 people paying taxes who make under $150,000? Wha- what's gonna happen with this when we look back on it a year or two from now?
- DFDavid Friedberg
W- I don't know where the tariff deals are gonna end up, so we don't know yet.
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
Right?
- CPChamath Palihapitiya
Yeah. So I'm asking for a guess, right? Yeah.
- DFDavid Friedberg
Yeah. And so I, I don't know. I don't know. Like I said, I think one of the biggest things that needs to happen that is being discussed in these trade deals is regulatory parity, such that US companies can participate evenly in foreign markets. I kind of have highlighted a few examples of why it's challenging for US companies to set up and do business in the local jurisdictions for a lot of our trade, trade partners across multiple industries. I think that's being heavily negotiated. So that doesn't make the headlines, that's not kind of the top of the news. Everyone talks about the tariff number, the tariff number, the tariff number, but at the end of the day, the access to foreign markets for US companies, you can even think about... I mean, a good example for us is a lot of the fines that happen to US tech companies in the EU, and there are just billions and billions of dollars of fines being paid out of our companies, that's another form of taxation. The fact that China won't allow US tech companies to operate, but we allow Chinese tech companies to operate here. So the regulatory parity is kinda the biggest thing that I think needs to kind of be identified in these deals before we have a real sense, Jake out, because this, again, could be a real economic growth driver for American businesses, and that could have a real effect on our GDP. So that's the biggest thing I'm looking for versus just the tariff number, is parity and access to global markets for US companies-
- CPChamath Palihapitiya
Reciprocity.
- DFDavid Friedberg
... and I don't think we know. And, and, and those are the details of the deals that are gonna take several months. Normally, these are multi-year trade negotiations with, you know, big trade teams that go back and forth over several years to figure these deals out. So to create maximal leverage and accelerate outcomes, it seems like a lot of this trade hype got everyone to the negotiating table. Now the hard work's being done to figure out the details of these deals, and hopefully we end up in a better place for American businesses because of it.
- CPChamath Palihapitiya
Chamath, I, I know where you stand on this. Uh, he creates that big pothole crater, everybody gets excited, it creates a lot of attention, and then, uh, maybe the real negotiation starts. So a year from now when we look back on this, what would success look like for the Trump administration in Chamath Palihapitiya's mind and assessment?
- JCJason Calacanis
I think this goes back to what I said at the beginning. I think tariffs have the potential to be the on-ramp to our version of Belt and Road. And I think that that is an incredible jujitsu move of what was an exceptionally well-executed and methodical program by the Chinese government to cement hard and soft power all around the world while the United States wasn't looking and obsessed with cheap garbage that they could buy at Target.
- CPChamath Palihapitiya
Hmm.
- JCJason Calacanis
Okay? So this should be a wake-up call to us. We don't need all this cheap nonsense. We can live with fewer things. Those things could be of higher quality, they may be of higher price, but more importantly, we need to make sure that we're cementing bilateral deals with as many countries in the world and building the next phase of Pax America, of American hegemony. We need to do it. So the fact that we are negotiating with China I think is very good, I think that they are a necessary partner of ours, but we can't take our eye off the ball. The tariffs was a way of ripping the Band-Aid of all this globalist free trade nonsense, and now we need to reset this in a methodical, calm way. Now, some markets we're not gonna get right, and in some industries, we have some very complicated thinking to do. As an example, which we'll get to later, the Pharma EO is very complicated and very nuanced, okay? But this is the hard and necessary work. So my perspective is, this is the beginning of Belt and Road 2.0. I think we started with a real bang in the Middle East, and I just encourage the administration to go and finish the job and get as many bilateral deals done as possible, and reset how important the United States is as a partner.
- CPChamath Palihapitiya
Mm-hmm.
- JCJason Calacanis
We always knew it, but we allowed that hard influence and hard power to get frittered away with all kinds of nonsensical, idealistic thinking that was just wasteful. And now we just need to-
- CPChamath Palihapitiya
Well, and it was also globalists who wanted to make money, right? It's, like, easier to make cheap stuff over there and then sell it here, and, uh, it's harder to make money (laughs) selling things once.
- JCJason Calacanis
I think that was... I think that was short term and non-strategic thinking by many of those companies. I think that we've created dynamics that we can change, we can change the incentives for how consumers consume in the United States, and I think it's worth thinking about how to do that.
- CPChamath Palihapitiya
All right. Well, here is the Polymarket on tariffs generating greater than 250 billion in 2025 that we set or Polymarket set. Basically, no chance that that's gonna happen, so we will see, (laughs) I think, everybody coming to the table and reciprocity bend-
- JCJason Calacanis
Well, I don't, I don't-
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
... I don't even know how you're gonna settle this, Jason, because what does it mean, will tariffs generate? I think it's a really interesting bet, but the real question is o- is on the measurement. There is not gonna be...... some number that OMB or somebody else puts out that says, "It generated X."
- CPChamath Palihapitiya
Well, I think Lutnick was saying he was tracking that, but we'll see. I mean, e- 'cause y- if it's reciprocity and we see us making more money or getting charged less fines to the examples we had earlier, then you could include those in it, but yeah, it's a hard, it's a hard bet to settle. But I think people believe it's not gonna generate a massive amount of revenue. The relationship with China and this sort of changing concept of consumerism, you think that's a possibility for America? Or do (laughs) Americans just want cheap stuff on Amazon and an unlimited number of Amazon boxes in their recycle bin?
- BSBen Shapiro
I mean, I, I'm not sure that's how consumers have ever thought about this sort of stuff. I mean, uh, you know, I remember when I was younger, there was, you know, a lot of talk about made in America cars.
- CPChamath Palihapitiya
Yeah.
- BSBen Shapiro
Uh, you know, buy, buy, buy made in American. And, and that just kinda failed, because it turns out that the American cars just weren't as good as the stuff that you could get elsewhere. And it turns out that Americans are both producers and consumers, and y- yeah, it's- it's- it's easy to say, "Don't buy cheap crap from China," but it turns out, a lot of stuff that actually is not all that cheap also was manufactured in China. Hopefully now it'll be manufactured in Vietnam or, or manufactured in India or in other third party countries. The idea that we're gonna be, you know, reshoring all that stuff to the United States, we're not gonna be making T-shirts in the United States. Th- that's not a thing. Um, but, you know, I- I- I do think that right now, m- my read is that we- it's too early to tell, um, meaning that, uh, this- this just reminds me of the old Yiddish joke where the couple isn't getting along, so they go to the rabbi and they say, "What do we do, Rabbi?" He says, "I want you to bring a chicken into your house." They bring the chicken in their house and still isn't working, they go back to the rabbi, he says, "I want you to bring a cow into your house." So they bring a cow into their house and they say, "It still isn't working, Rabbi. It's just terrible." They- they go back to the rabbi, he says, "I want you to bring two goats into your house." They do that, they come back and s- th- he, the husband says, "This is awful. I can't handle this." He says, "Take everything out of your house." So they take all the things out of their house and they're like, "Oh my God, this is- this is just fantastic," because that- that's basically-
- CPChamath Palihapitiya
(laughs)
- BSBen Shapiro
... what Trump did here, right? He put the chicken and cow and the two goats in the house. I still think he left the chicken, right? And so-
- CPChamath Palihapitiya
Yeah.
- BSBen Shapiro
... it's- it's kinda- it's gonna be, you know, a question as to how much impact the chicken has, meaning the 10% tariff rate that we still have on the rest of the world is, you know, more than quintuple what it was at the very beginning of this process. I mean, the average tariff rate, uh, not to use a, you know, a number that David doesn't like, but the average tariff rate right now is higher than it's been any time since the 1930s. Is that gonna have some carryover effect? I mean, Walmart is already suggesting they're gonna have to start increasing their prices. So, I don't think that we're out of the woods, and I do think that the biggest threat with regard to this sort of stuff is less the tariffs than the feeling of uncertainty for investors as to what comes next. And that's where the pharmaceutical EO starts to come in, or the negotiations over- over the tax bill. What actually makes it in? What doesn't make it in? W- when- when it comes to, you know, the stuff that makes investors sanguine, I think one of the reasons why investors are sanguine about Saudi Arabia is because Saudi Arabia is a kingdom, and that kingdom is very wealthy. And that very wealthy kingdom doesn't have to worry about the next election. They don't have to worry about the next policy that- that they just have to throw out there for public consumption. Now, President Trump, because of the rapid shifts in policy, the- the feeling, if the- if the feeling comes away as, "We're now back on a solid path, this was all a tactic and- and we're hunky-dory," great, you're gonna see the markets go up, you're gonna see more investment and all the rest. If the feeling, and it... Basically, more Scott Bessent and fire Peter Navarro into the ocean via catapult-
- 46:33 – 1:18:48
GOP divided over "Big, Beautiful Bill" due to its impact on the US debt spiral
- CPChamath Palihapitiya
Republicans are working hard on the Big Beautiful Bill. It's- it's big and it's beautiful, Ben. I don't know if you wanna get into your Trump, dueling Trumps, but it's a big, beautiful bill.
- BSBen Shapiro
"So big, so beautiful, many people are saying..."
- CPChamath Palihapitiya
And many haters, Nancy Pelosi, nasty woman, uh, she bet on Walmart, bad bet.
- BSBen Shapiro
(laughs)
- CPChamath Palihapitiya
GOP's plan (laughs) is to push this bill via reconciliation so they can avoid the Senate filibuster with 51 votes instead of 60. The Trump bill would extend the 2017 Tax Cuts and Jobs Act through 2034. That's kind of the big piece here, is these tax cuts. And there's a bunch of campaign stuff like no taxes on tips or overtime, things that Trump promised to, you know, in some cases swing states like Nevada, those are, uh, trying to get in there, and an increase on universities' endowment tax. And the Tax Foundation, this is a nonprofit that analyzes tax policy, estimates the tax cuts would reduce revenues by 4.1 trillion over 10 years. That's 400 billion a year. And, uh, the bill also aims to cut 1.5 trillion in spend over the next decade. Some Republicans think this is weak and are pushing for two trillion in cuts or more. Notable cuts include a stricter SNAP rules, tighter Medicaid caps and removing taxpayer benefits from illegals. Gosh, uh, Friedberg, you actually (laughs) , I understand from our group chat, did a deep dive here and you, I think, are responsible in many ways for bringing the issue of our national debt to the forefront, especially, particularly with this administration and Doj, which we give you a lot of credit for, you being a single issue voter for this. Are you worried about the budget now? We're- we're 100 plus days into Trump. Do you think he's got any chance of cutting the deficit?
- DFDavid Friedberg
I'll talk about the House tax bill, which I think is, to use your term, J-Cal, absolute disgraciad.
- CPChamath Palihapitiya
Oh. (laughs)
- DFDavid Friedberg
I, uh-
- BSBen Shapiro
(laughs) .
- DFDavid Friedberg
Bill is disgraciad?
- BSBen Shapiro
Disgraciad? (laughs) .
- DFDavid Friedberg
Disgraciad.
- CPChamath Palihapitiya
Oh, shit. (laughs)
- BSBen Shapiro
Il est mal, le disgraciad.
- DFDavid Friedberg
Oh, wow. It is absolute disgraciad.
- BSBen Shapiro
(laughs) .
- DFDavid Friedberg
If you're an American, you should feel shame...... that your elected officials are proposing, that this is the bill that gets passed, that we vaporize this much money, that we put ourselves this much further in debt, that we do not treat this situation as the fiscal emergency that it is. The bill ultimately yields no real change in the annual deficit. The annual deficit could climb to $2.5 trillion, being added to the federal debt load every single year going forward. In fact, if you look at the treasury yields, the 30-year is now kissing 5%. So the United States has about $37 trillion of debt. At 5%, we're paying close to $2 trillion a year just in interest on our debt as this debt gets refinanced. In fact-
- CPChamath Palihapitiya
Freeberg, do us a favor for the audience. If you could explain why it's going up, why it's so high, and what that means in term-
- DFDavid Friedberg
Why, what's so high, the debt or the interest rates? The interest rates-
- CPChamath Palihapitiya
The interest rates. Yeah.
- DFDavid Friedberg
Well, the interest rates are going up because... The, the probability that the US will default on its debt payments, which is what you're buying when you buy US Treasuries, you're getting the US government to pay you some number of dollars with interest over time. And the market is now demanding that that interest rate be as high as 5% because of this fiscal situation that the United States finds itself in. We are now burning an additional $2.5 trillion a year, adding to our debt load. We are in a fiscal crisis, and we're not willing to admit it. And I've said this from day one, that DOGE can only do so much. And clearly, that's the case where they're now talking about sub $300 billion a year in potential annual savings from, from DOGE action. At the end of the day, Congress needs to take action, and this bill from Congress doesn't take much action. I will tell you that if you look across the board, all of these programs are still being proposed to be run at a cost that is well in excess of their pre-COVID levels. And so I would set two guiding principles if I was, uh, to be the benevolent dictator of the United States of America. My guiding principle number one would be that any program that we intend to continue to persist have its budget level cut to pre-COVID, to 2019 levels. Second would be... And if we did that, by the way, we would be in a much better fiscal situation. The second would be that we add no new programs in the moment. There's a whole bunch of new shit thrown into this bill, as well as increasing the cost and a few cuts here and there. I'll just highlight a couple of things that I think are worth noting. You know, there's a cut in the SNAP program, which is the Supplemental Nutrition Assistance Program. That's food stamps. And I talked about this with Brooke Rollins in the interview I did a few weeks ago. You can watch it on YouTube. And we talked a little bit about how this SNAP program has absolutely exploded in size from 60 billion a year in 2019 to 120 billion a year today. So in this budget proposal, they're actually cutting it back by about 30 billion, so to 90 billion. So it's still 50% higher than it was pre-COVID. And there's a lot of kind of stories we could go through on what happened during COVID that caused this thing to blow up the way it did. But political wrangling pulled money out of the government into people's pockets, and that is persisting today. I'm a big believer in cutting taxes. Obviously, I'm probably more libertarian than anyone else on this show or that we've ever had on this show. But at the end of the day, you can't just say, "Hey, let's cut taxes and spend more than we're making." It doesn't make sense. A lot of this stuff is gonna be exploitable. The tips and overtime exclusions are a way to pander to people to get votes, and now keeping your promises on those votes. I think at the end of the day the tips and overtime rule could invite a lot of gamesmanship and loopholes-
- CPChamath Palihapitiya
Hm.
- DFDavid Friedberg
... that will be created, and people will wake up and be like, "Uh-oh." For example, if I'm an independent contractor, I will enter into a contract with someone that says, "Here's the service I'm providing you for 50 bucks, and then there's an optional tip you can give me at the end." And then I-
- CPChamath Palihapitiya
Yes.
- DFDavid Friedberg
... won't pay taxes on that tip. And I can give you 100 other examples that this will create an inordinate number of crazy, insane loopholes. The interest on the debt, at $1.9 trillion a year, equates to 7% of GDP. That means 7 cents of every dollar that moves in every transaction in this country is being used to pay down interest on money we overspent in the past. It has become an absolute crisis. I think that there's a few folks that should be shout out on this, which is Senator Paul and Senator Ron Johnson, who both highlighted how ridiculously under-impressive the spending cuts are in this bill. I think we've got a lot of work to do. I'm deeply disappointed, I'm scared, and I hope that, um, that this all gets kind of fixed up and-
- CPChamath Palihapitiya
Do you-
- DFDavid Friedberg
... uh, and reconciled.
- CPChamath Palihapitiya
Do you think that we should line item out all the new spending irrespective of what it is?
- DFDavid Friedberg
All new spending, line itemed out. That's, that's rule one. And rule two is all existing programs gotta go back to pre-COVID levels. You do those two things, we're in a great place.
- CPChamath Palihapitiya
Yeah, and just to put some numbers and some charts behind it, here is the, the debt back to Clinton era. Clinton obviously balanced the budget, so you get this nice, uh, flatness there. Clinton added, uh, 392 billion in eight years. It's barely noticeable on the chart, 40, 50 billion a year. Bush, 5.4 trillion, four years, about 1.3 trillion a year. Obama, a trillion a year. And then we get to Trump 1.0, two trillion a year. Suddenly, we decided we would double it. Biden, same thing. They added almost exactly the same amount, two trillion-
Episode duration: 1:37:17
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