Making the case for industrial freedom—instead of tariffs—on Donald Trump Jr’s show

It’s important to have nuanced conversations about tariffs.

Recently I had the opportunity to share my view on Donald Trump Jr.’s podcast, Triggered, which is that there are real problems with our industrial capacity, but the solution is industrial freedom, freer trade, and non-tariff punitive actions against China.

Here’s the video and transcript.

Alex Epstein:

Let’s have a free market and let’s make sure we get rid of all the barriers. One thing this administration is doing that’s very good is trying to figure out for every industry, “Hey, what are the barriers?”

What are the barriers holding back nuclear? What are the permitting barriers? What are the barriers holding back electricity as such? What are the barriers holding back oil and gas? We want to get rid of all of those barriers. That’s the key.

And by the way, just so people know, I know this is controversial, but right now we’re making some big decisions as a country about trade. And I would say, I’m definitely on the side of let’s make sure we have really good trade relationships with our allies, because Canada and countries like that, they can be really, really big allies.

And that’s going to be part of dealing with the China situation, which is a real problem, making sure that we have maximum freedom here and that we have interaction with free allies as well. I think we need to scale that up, so get rid of all the barriers as quickly as possible. That’s the urgency. Giving money and special favors to people, that doesn’t accelerate anything on any scale.

Donald Trump Jr.:

Bigger picture, guys. How does—since you brought it up—how does tariff and trade policy impact each of the work that you guys are both pursuing, even if it’s separate and divergent? I think we all agree that energy security is national security. I’ve been saying that for years, ever since they cut off Keystone Pipeline and all of these other things. I’d love for you to both lay out what it means to you.

Alex Epstein:

I’m putting out something on this soon. I have a considerably different position than I’ve heard anyone express.

Part of what’s happened is there is a really legitimate concern about certain structural issues with the United States economy, including dependence on China. and in particular, we definitely have unnecessarily diminished industrial capacity.

And you see this, especially in, you mentioned critical minerals, rare earth dependence on China. These are really serious kinds of things. Worries about, hey, in a wartime situation, are we going to be able to ramp up manufacturing in the way that we would like to be? So these are very legitimate concerns.

And I think there’s a temptation for tariffs, because it’s something fast, it’s a fast action you can do, but I actually think the actual solution is entirely—I mean, it’s basically two things—but the main thing is much more industrial freedom.

The reason for the problems that we have is just a dramatic decline in industrial freedom over the last 50 plus years. And I mean, we could go through this chapter in verse, but the whole National Environmental Policy Act, or NEPA, just making it impossible to build things.

But just to give you one example, I’ve studied the early oil industry. The first ever long distance pipeline, guess how long it took to build in the 1870s? Three months. It was completed within six months of the company being started. So think about this, in the 1870s, we know the Empire State Building was built in slightly over a year with the technology of a century ago.

So it’s all that we are hamstringing ourselves. If you have a country with property rights and clear laws against endangering others, but not like “protecting everything in the world from any impact by us.” If you have that, if you have innocent and until proven guilty for businesses, if you have clear laws, written by usually Congress and enforced clearly, that system, there is no comparison to that. There’s no comparison to that whatsoever.

But unfortunately we created this kind of green fascist system, which in many ways this administration is trying to undo, but it needs Congress’s help a lot because you can only do so much as the executive. But this lack of industrial freedom is the reason for our diminished industrial capacity.

Now, part of this industrial freedom, part of what makes it better, is actually trade, particularly with allies who also have industrial freedom and are aligned with us—because that way we get to take advantage of the resources from other places.

Canada has three times our oil reserves. They have three times our oil reserves. We could have an amazing relationship with Canada. They, like us, have limitless natural gas. The two of us together could just be even more dominant on the world stage.

We have a lot in common with Australia. There’s all sorts of other things. It’s gonna be totally crucial to have these relationships to deal with China.

Now, with China, I think, the main problem has been that we have not been clear about how we designate them. Are they an ally? Are they an enemy? Are they a beloved trading partner? You need to decide what China is and make policies accordingly. But ultimately you’re gonna need industrial freedom and trade to outcompete, to outcompete China—or hopefully China becomes more civilized and less communist. That would be the ideal.

And one final thing is there is a legitimate thing of, hey, we need some things domestically for wartime. But I believe the way to deal with that is not to subsidize industries and not to pass general import taxes, which is what tariffs are, essentially. It’s to say, hey, the government needs to set aside certain critical minerals deposits. It needs to set aside even certain manufacturing facilities, as part of its military strategy.

So we can make some of that stuff a military expenditure, but I don’t think that we want to pass taxes and screw up our relationships with our allies and create uncertainty in the markets. Because unfortunately what you’re seeing right now—and this is why we need really good trade deals soon—is we have a lot of uncertainty in the markets, oil prices are getting depressed, and oil—that’s really hurting the oil industry—and they’re not gonna do anything until they have more certainty. Plus their steel costs are going up.

So I think if we can—there are different forces and different advisors, and I’m not an official advisor—but my advice is go in the direction of double, triple down on the industrial freedom, double down on the trade with allies, having even better relationships, and then do some specific stuff with regard to security in China.

One quick thing about China because I want to avoid any wrong implication. So I think China, there are a number of diplomatic tools that we can use against China and different kinds of things. And there are all sorts of issues with them, like stealing our technology, stealing I.P. There’s a whole laundry list, which I’ll write about soon.

But I don’t think tariffs right now are the effective way of dealing with them. Like, if you look at the nuclear industry, they’re really getting harmed by that. Fusion in particular, which is an important area of innovation, they have a lot of near-term dependence on China. So the fact is, we’ve gotten into this situation where we have more dependence on China than we’d like to. I don’t think you can tariff your way out of that.

I think you need to industrial freedom your way out of that, have specific targeted punishments toward China that are not tariffs that punish us, but that actually punish China.

So there’s more to say about that, but I just wanna be clear, I don’t think the tariffs are the right mechanism right now. I think that we need to do other things to solve the problems that are rightly being recognized.

Donald Trump Jr.:

Now, Alex, I don’t even disagree with you as it relates to some of the instability in the markets right now. But isn’t there also a sort of a cost to rushing into a bad trade deal? Don’t we need to perhaps reorient, maybe the whole system?

And some of that takes time. I think maybe that’s the problem with being in a trade war or any kind of war with China. We are so accustomed to this instant gratification society. We live in a two year political cycle and people make bad decisions for the long run to be elected in two weeks, as opposed to 50 years.

That to me seems to take some time. How do we avoid those pitfalls so you don’t end up basically being in the same place?

Alex Epstein:

Well, I mean, I think this is another controversial view, but I think ultimately, like you want, I think ultimately the long-term deals need to be made by Congress and it’s just because the stability is very key to all of these deals.

And so Congress gave the executive a certain amount of power. And I can understand the temptation to use it, but I think it needs to be a congressional thing. Because you’re seeing right now the instability and unpredictability of depending on any particular person, is a real issue that the markets will always have.

So that’s one thing. We’re in a certain position right now. I would say that in general, the deals are going to be lowering the tariffs. I think the negotiations that should happen are fairly straightforward in terms of fundamentally, you want to get other countries to lower barriers and have us lower barriers.

So that’s primarily lowering tariffs, but then also lowering if they have some particular refusal to import our stuff—I’m not saying that justifies the tariff by us—but that’s the kind of thing you wanna negotiate. But I think fundamentally that overall the deals are not that complex, especially with your allies.

I think Elon was right. You want a tariff-free zone where with your allies—with Europe, with Canada, with Australia—we need a lot more industrial freedom at home, and then we need freedom to trade with them. So that’s what I’d focus on first. Also, our allies in Asia—Vietnam, Japan—that’s what we want, is this entire block of free nations or relatively free nations that have incredible free trade that are all doubling down on industrial freedom to counterweight China.

Just being in Africa—I’ve been there a bunch of times, but for my honeymoon, even—if you go to the different places, China’s just trying to take over there. James mentioned Chile. China’s very strategic about all these relationships.

People say China has used tariffs. China’s dramatically lowered tariffs over the past five decades as part of their strategy. So they use exploitation in a way—

Donald Trump Jr.:

But you still can’t buy a Ford in China. I mean, it goes beyond tariffs in a little way. I mean, there’s other obstacles.

Alex Epstein: That’s why I said other kinds of things. Yeah. So you want to minimize as many of those as possible. And I can mainly speak to energy and industry because those are the things I know most directly. Right now, what I’m saying is just what I think, but it’s also what I’m hearing from other people. If they had stability, if we had what Elon is advocating and others are advocating on the free trade side with more industrial freedom, that would be a really exciting level of stability.

And it would be more economic growth, which for oil and gas is what they depend on. If you’re in the Permian Basin, there’s no amount of deregulation we’re going to do there that’s going to materially affect their finances and their ability to “drill, baby drill.” If they have an innovation 10 years from now, yes, but the main thing is they need prices to be at a certain level. It doesn’t need to be too high, but if the prices crash due to economic instability, that is going to dramatically reduce energy dominance, at least with oil and gas.

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