‘We can make TikToks but don’t have scientists for drugs’: Chamath Palihapitiya on tariffs, says US unprepared to fend for itself

Venture capitalist and entrepreneur, and former executive in Facebook, Chamath Palihapitiya, said America is ‘totally unprepared’ to fend for itself. He said they can’t make things in the country anymore. Palihapitiya explained that Trump’s tariffs are a way to ensure that they take control of a lot of the markets and get themselves to do the hard work. 

Speaking to Andrew Schulz in a podcast, Palihapitiya underscored the nuances behind Trump’s tariff decisions. He said America is one of the largest consumer markets and other countries have benefited from it for a while. Many American companies, in order to save on costs, manufacture their products in other countries, which they then sell in the country, thereby benefiting these nations. He highlighted the economic imbalance and also pointed out another problem arising from it. 

“You saw this in COVID, America is totally unprepared to fend for herself. If push came to shove we can't make things here anymore. We have kids that can make TikToks but we don't have scientists that can make drugs. That's not sustainable, that's not a secure country,” he said. 

Palihapitiya said the US needs as much electricity as possible and one of the primary things it needs energy for is electric vehicles. “We need more energy for electric cars, I'll just use that as an example. Electric cars need an electric motor. So far so good. All of that stuff can be American but inside the electric motor is a magnet that spins really quickly. That magnet is made from something called Rare-earth (elements). There is nobody right now that can really secure a meaningful pipeline to those Rare-earths except through the Chinese. They're incredibly good at it, they're incredibly sophisticated, and they have a top-down way of organising that market.” 

He said that if anyone needs batteries that can store energy then there are two companies that know how to do this at scale and they are both Chinese. “You can go on and on down the line in every critical market where America needs to be able to take care of itself right under all weather conditions. We have become very fragile. So tariffs have this dual pronged impact. Prong number one is it starts to realign the world order but prong number two is that it allows us to start taking back control of a lot of these markets – so that we do the hard work, so that we can rely on ourselves. Otherwise if something bad were to happen, there's like a lot of really bad outcomes here, where we cannot fend for ourselves. We can't make the vaccines we need, we can't make the technological equipment we need, we can't make the computers we need, we can't make the chips we need.”  

Speaking along the same lines of manufacturing in China, former Uber CEO Travis Kalanick in another podcast said, “There's no way I could express the frenetic intensity of copying that they would do on everything that we would roll out in China. And it was so epically intense that I basically had a massive amount of respect for their ability to copy what we did. I just couldn’t believe it. We would do real hard work. We'd dial it, and it would be epic, and it would be awesome. We'd roll it out, and then like two weeks later, boom! They've got it. A week later, boom! They've got it."

Meanwhile, in a conversation with CNN, Shark Tank judge Kevin O'Leary "America is the no.1 economy on Earth with all the cards. We will not have that forever. It's time to squeeze Chinese heads into the wall," he asserted. 

He also accused China of stealing intellectual property and indulging in unfair trade practices. China has been in the World Trade Organisation (WTO) for decades and never abided by any rules, he said. "They cheat, they steal, they steal IP. I can't litigate their courts. They take product technology, they steal it, they manufacture it, and sell it back here."