For years, Oren Cass has been the voice of the wilderness, calling on America to rebuild its industrial power, underscoring the central role that tariffs play in every serious plan. Today, his ideas have real traction. The Trump administration is actively pursuing shape by his think tank, the American compass. He joined me on Friday to discuss the trade war and the path to a new American century.
The interviews have been compiled for length and clarity.
Beltway Brief: These past few weeks have been wild rides for US tariffs. What should President Trump’s administration and the United States achieve more broadly to demonstrate that they are serious about trying to reinvigorate American industrial bases and the middle class of America?
Orenkath: There are things we need to achieve globally and things we want to see domestically. Globally, we are moving from the post-Cold War liberal order, who said, “Whatever is good for General Motors is good for America.” If other countries send our industry with an aggressive export strategy, we need to thank them for sending us something cheap.
And I think two things have happened. For one thing, it has been very encouraged over the last few years to see economists beginning to admit that it was wrong. flat [former Treasury Secretary] Janet Yellen
I said She says “Never.”
We discussed the Round Table with Jason Furman in the New York Times. Jason Furman said exports were a bad thing. You have to work hard to get good stuff. And now he admits that he can actually make things. That is an important change.
The US needs to stop trying to make everything great for everyone. We need to focus on our own interests.
The second shift is merely the perception that there is no global liberal world order. If so, it’s gone now. We are in a multipolar world. China has an influence in that territory and the US needs to stop trying to make everything great for everyone.
We need to focus on our own interests. We should be hoping for strong partnerships and blocks that cooperate in trade and security, but that won’t be “free.” There are conditions. Everyone agrees that trade needs to be more balanced, that everyone should have a strong industrial base, and that everyone should hold hands and keep China out.
If we can build that block, the advantage we see at home is a major investment in industrialization and rebuilding our industrial base.
BB: The first week of this trade war seems to be driving your path. Does the administration maintain credibility in negotiations not only with China, but with 75 countries that have come to negotiate?
OC: That’s exactly the right question. we [at American Compass] He was extremely critical of the movement of the first liberation day.
It’s encouraging to see an administration seeking to acknowledge short-term costs in order to earn long-term benefits. That’s the leadership we need. However, there was room for improvement in detail. It creates unnecessary uncertainty that is too fast and flips positions – they all impose avoidable costs. It’s a healthier model as they paused and set a clearer direction.
Even in China, I want to see high, permanent tariffs. But going from zero to 100% or more on the first day is not helpful. If you are a company considering moving production from China, what you care about is what the tariffs are in two years. If you know, if we are trying to step up to 50%-60% tariffs in stages, it gives you the incentive to move. But if you suffer high tariffs overnight, the pain hits the person we want to succeed. A systematic, step-by-step approach with clear communications offers more upside down at less cost.
BB: Do countries compete to achieve a US-led trade order rather than going one by one?
OC: Yes, you want the country to hurry to the table. But we have to be realistic. The US cannot negotiate 70 contracts at once. Especially if you don’t make clear what those contracts look like.
The real benefit of a 90-day suspension is that it can be incredibly done. If you are chasing 70 countries at once, each still has other trading partners and we are feeling the pain of all measures at once. It weakens our position.
However, for example, if you stumble to make a deal with Japan and Australia first, you will create a template. Then the others see what comes. You delay tariffs for things you are negotiating in good faith, and if some countries are outside, when tariffs are attacked by them, the reason is clear. It is far more reliable and less destructive than what we saw on the day of liberation.
And it gives the company time to see what’s going on and ask, “What should we prepare for? Who should we bet?” It is a better way to achieve what the administration wants.
BB: He has acquired several George W. Bush wars on the terrorist atmosphere from early announcements. The White House message doesn’t seem to prepare the American people to appear to be aware that their 401(k) is falling into the stock market as China’s dollar decline falls into the stock market and that it will be a hit as housing and other value is poured into our economy.
Has the administration done enough to prepare its people for what comes next: the impact on financial markets and economic pain? What can they do better?
OC: Messaging needs to be more clear. You need a case of why diagnostics, planning, and costs are worth it. Without it, it would be difficult to maintain political support.
Ronald Reagan did it in 1981. The US had serious economic problems. Feds’ Reagan and Paul Volker have pushed us into a fierce economic downturn. Interest rates are above 20%, unemployment rates are above 10%, and stock markets are declining. Still, Reagan was re-electioned for the landslide in 1984. Because he explained what was wrong, what needed to be corrected, why it was worth it.
That’s what the Trump administration needs right now – ideally a big speech from the president. Vice President Vance is a very effective communicator, so it could be him. But that needs to be clear: here is the challenge, here is the cost, here is the long-term reward.
And yes, you’ll have the elite, you’ll have the media and push as aggressively as possible about this being a disaster. It’s especially interesting to see people in the heart suddenly decide that the stock market is the ultimate arbitrator. In other words, you have someone you like [Bill Clinton’s former Treasury Secretary] Larry said, “Well, here the stock market has fallen. It is essentially the perfect proxy for the well-being of society, so you can multiply that loss by five and see how bad this is for the country.”
That’s ridiculous. But that is also the reality of our politics. And that is something the administration must anticipate and overcome.
BB: Do you think the president’s goal is to isolate China, build a new system, or simply make a better deal?
OC: Indicators were seen on both sides.
The president’s most keen advisors – Vance, Scott Bescent of the Treasury Department, Stephen Milan of the Economic Advisors Council, and Jamieson Greer, the US trade representative. They are looking at the decoupling of the global economy. Marco Rubio, now Secretary of State, has seen it for such a long time. Bescent even emphasized that they hope to leave China in negotiations with Mexico and Canada.
At the same time, I hear the president stay silent. [Chinese automaker] We will build an EV factory here. It suggests that he still sees this as a showdown that leads to some sort of deal.
Therefore, it needs to be more clear. And this is where Rubio framing helps. It’s not about preference, it’s about reality. There is no path to sound trade relations with the communist authoritarian regime that runs a state-controlled economy.
We have been trying to engage for 25 years. It did not free China. It made them more authoritarian. The only option is to embrace reality and do what is best for America. It’s about separating our economy from China’s economy.
Doing that allows you to ask your allies to do the same. If we can guide the block that thinks that way, that would be very good for the US.
BB: Can people follow your work?
OC: All our work on trade, China and globalization is in AmericAncompass.org. Our new magazine, the general one, is holding a symposium on all of these CommonPlace.org. I’m x @oren_cass.
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