The Great Tariff Debate with David Sacks, Larry Summers, and Ezra Klein

**Larry Summers** (0:00)
Looking forward to our thing in a few weeks.

**Ezra Klein** (0:02)
Yeah, I don't know if I'll end up being there, but I'm hoping to. I'm hoping to.

**Chamath Palihapitiya** (0:06)
You guys have like a liberal cuddle party, or what are you doing?

**Ezra Klein** (0:09)
Yeah, Larry takes a bunch of MDMA, and we all sort of go into the corner and hang out together.

**Chamath Palihapitiya** (0:14)
God, that sounds incredible.

**Ezra Klein** (0:16)
Liberalism is wonderful, man. You should come try it.

**Chamath Palihapitiya** (0:18)
That's not liberalism.

**Ezra Klein** (0:19)
It's called something else, Ezra.

**Chamath Palihapitiya** (0:21)
Sorry, Nicky, is our crypto's are joining us or no?

**Ezra Klein** (0:24)
He's I'm talking to now. It looks like he is.

**Chamath Palihapitiya** (0:27)
Oh, zing. This is going to be great.

**Jason Calacanis** (0:30)
To be like ratings bonanza. All right. We do have David Sacks here. David, let's have a quick time on.

**Chamath Palihapitiya** (0:35)
Look at Sacks. He looks so presidential.

**Jason Calacanis** (0:37)
He looks thin, doesn't he?

**Chamath Palihapitiya** (0:38)
He looks fabulous.

**Jason Calacanis** (0:39)
All right.

**Chamath Palihapitiya** (0:40)
Here we go.

**Jason Calacanis** (0:40)
Three, two.

**David Sacks** (0:50)
And it said, we open source it to the fans and they've just gone crazy with it.

**Jason Calacanis** (0:58)
All right, everybody. Welcome back to the number one podcast in the world. I'm your host, Jason Calacanis, with my besties, Chamath Palihapitiya, our chairman dictator and live from, well, the administration, Mr. David Sacks, our czar for AI and crypto. And amazingly, two fantastic guests this week. We have a New York Times writer and host of the Ezra Klein podcast. He's got a new book with Derek Thompson, Abundance, and he co-founded Vox in 2014 And he's our guest here today before Trump ships him to El Salvador. Please welcome Ezra Klein. How are you, sir?

**Ezra Klein** (1:36)
Glad to be here in my final hours of freedom.

**Jason Calacanis** (1:38)
Okay, great. Good to be here. Sorry, Sacks. And with us, of course, Larry Summers, economist, former treasury secretary under Clinton, former director of the National Economic Council under Obama and the president of Harvard from 2001 to 2006 Thanks for coming, Larry.

**Larry Summers** (1:54)
Good to be with you.

**Jason Calacanis** (1:55)
Okay, we have a lot to get to here. So we might as well talk about the big news of tariffs. It's day 80 of the Trump presidency, a second presidency, his second term. And Trump tweeted that he paused tariffs for everyone but China on Wednesday. Basically, let me just cue up the details, Larry, and then we'll get your take on all of this. Just one week after Liberation Day, Trump announced on Truth Social that, in effect, he was raising tariffs against China 125% based on their lack of respect, quote unquote, instead of negotiating, and that he was pausing reciprocal tariffs on all other countries for 90 days. And markets ripped 10% after he posted this. And today, Thursday, when we tape, there's been a massive sell-off on Wall Street, so the roller coaster ride continues. What it will be on Friday when you consume this podcast is anyone's guess. S&P is down 5% today. For context, the S&P was at 5,700 pre-liberation day, so about a 9% drop after these wild swings. And in fact, this has been historic volatility.
Here are the top sell-offs in history. As you can see, three of them came during Black Monday in 1987 Three of them came during the financial crisis. Three of them came during COVID. And coming in 11th is Trump's tariffs. Also in the gainers, you have these big rebounds. Wednesday's 9.5% recovery was number three. The administration says this was all part of a master plan. We'll hear more about that later. And that they laid a trap for China. They laid a trap. Besant has been the spokesperson during this retreat or whatever we're going to call the pause and quote, this was driven by the president's strategy. He and I had a long talk on Sunday and this was his strategy all along. I don't think we need to play the clip. That's the gist of it. The White House account then tweeted in all caps, my favorite way to tweet, do not retaliate and you will be rewarded. Wall Street Journal on the other side posted a story about why Trump blinked. They chronicled the decision as being affected by Jamie Dimon, who went on Fox to express fears of recession while saying the tariffs were valid and that he knew the Trump and cabinet will be watching him on Fox. Other banking executives who felt they didn't have a lot of influence in this administration, according to the Wall Street Journal, started lobbying Republican lawmakers, that the Trump tariff plan would tank the economy. The White House Chief of Staff, Suzy Wilde, started receiving calls from executives and lobbyists expressing concerns, and the Wall Street Journal reports that Trump was influenced heavily by Besson. They were flooded with worried calls from Wall Street and that the president was lobbied to find an off-ramp. Trump ultimately relied on his instincts, according to the administration. Larry, is this 4D chess or is this something else? What are your thoughts?