Outgoing Commerce chief: “The only way to win is to out-innovate them”
With less than a week until President-elect Donald Trump is sworn into office, President Joe Biden’s Cabinet officials are preparing to leave their positions. For Commerce Secretary Gina Raimondo, the Jan. 20 inauguration became a deadline to make the most of the funds provided in the CHIPS and Science Act.
“Marketplace” host Kai Ryssdal has spoken with Raimondo three times since she took over Commerce in 2021. For their fourth and final interview while Raimondo is secretary, they spoke about new rules for American-made artificial intelligence chips, the U.S. trade relationship with China and change in the agency during her tenure. The following is an edited transcript of their conversation.
Kai Ryssdal: You have been working hard the past several months based on everything that’s coming out of your department, on the CHIPS Act and AI regulation and all that jazz. And I guess the first question is, how sharply did the results of the election concentrate your mind?
Gina Raimondo: Well, they concentrated my mind very sharply, although I can’t say they changed the work I’m doing here very much. We have had a plan all along to make the bulk of these investments by the end of the administration, regardless of who won the election, and we’re sticking to that plan. Obviously, deadline, you know, focuses the mind, but we are on our path. We’ll have invested almost all of the CHIPS money and the broadband money by the end of the week, which was our plan all along. And I’m proud of the team.
Ryssdal: Your people have said you want to cement a massive industrial legacy. I guess I wonder if that’s what you thought you were going to be doing when you took this job.
Raimondo: You know, in a way I did, in a way I didn’t. Of course, I couldn’t have predicted we’d be so successful. Under the president’s leadership we have, you know — the Commerce Department, under my leadership here, we will have invested $90 billion into infrastructure, internet, manufacturing and chips. I could never have imagined the scale of it. That being said, when the president hired me for this job, he asked me to take the job to help rebuild American manufacturing. And so certainly that’s why I did it. And I am a strong believer — you know, when I hear President Trump say we’re just going to tariff our way to a revitalization of American manufacturing, I don’t believe that. You know you need to make investments, and that’s what I’m proud of, that we’ve done.
Ryssdal: Setting aside for a second the question of President Trump’s promised tariffs, about which there will be more on this program and certainly in the news and the months to come, how worried are you about what President Trump clearly plans to do with this economy, which is more isolationist, less involved overseas, and perhaps rolling back some of what you and President Biden have set out to do in this administration?
Raimondo: Well, he’s inaugurated in a few days, and let’s see what he does. You know, we’ve learned with this president there, there’s often a difference between the rhetoric and the action. I will say I met a week ago with my successor. It was a very productive meeting. He’s supportive of the CHIPS Act. You know, everything I’ve worked on, Kai — the CHIPS Act, broadband — is bipartisan. We still enjoy strong Republican support for the CHIPS Act and the semiconductor work. Becoming isolationist, 100% tariffs, these are not good moves for our economy. But let’s see what they do rather than what they’ve been saying.
Ryssdal: Speaking of bipartisanship, there’s another sort of angle on this, right? You’ve got Democrats and Republicans who generally favor what has been done in their specific districts or states to using the money that President Biden and the Congress and you have seen fit to spend. There is, of course, the corporate challenge, right? Corporations are grateful, as we talked about last time, for the seed investment that you have made, but they are also sort of chafing a bit at some of the AI regulations. The tech firms are not happy with some of your restrictions on exports. How do you balance what the tech companies want, which is sales and money, versus what you decide, and President Biden decides, are in the national interest and in national security concerns?
Raimondo: Just as you said, it’s a balance, and you have to be practical. And most important, you have to work with your allies. That’s something I’m very proud of. With export controls, you know, if the U.S. prevents U.S. businesses from selling equipment or technology to China, but China can buy similar product from a Japanese company, a Korean company, a German company, it’s just not effective. And as you said, you deny American companies revenue, which I never want to do. Now, America has the strongest economy in the world. That’s good for America, and we want to keep it that way. So I think what we want to do is be as narrow as possible, only as broad as we need to be to protect our national security, but really work with our allies. So in the case of semiconductors, we’ve worked in an unprecedented way with the Japanese, the Koreans, the Germans and the Dutch to align our controls so that American companies aren’t at a competitive disadvantage with their European and Asian competitors.
The other thing that I’ve learned, Kai? There’s no substitute for a huge, significant amount of industry engagement. This stuff is unbelievably complicated, and you just can’t engage enough with industry to learn, like, where to draw the cut line. And as you say, you want to draw it in a way that protects national security but doesn’t deny companies revenue that they need.
Ryssdal: I get that you have to work with industry, but industry is, in some regards, a little irritated with you, right, on this?
Raimondo: Yeah, you know. And that’s fine, too. I’m very comfortable with that. I’m very comfortable with that. That’s my job. Their job is to make money. My job is to protect America’s national security. So I have no problem annoying them. I have no problem — if it’s in the country’s interest, I have no problem telling them, “Sorry, you can’t sell this, and you’re not going to make the money, because China is going to use that to modernize their military and use it against Americans.” That I’m very comfortable, and I’ve had hundreds of very tough discussions. My only point is, this is really sophisticated, complicated technology, and so the only way that we can learn is if we get into the weeds of the technology, and that means talking to industry to understand it.
Ryssdal: Let me dig in on China just a little bit. You have said in the past, “Trying to hold China back is a fool’s errand.” Does that mean you’ve got to work with China or you’ve got to stand in their way? How do you manage that relationship? And I realize I’m asking the woman who’s on her way out, but what have you been doing?
Raimondo: You know, our export controls have been effective, and they slow China down. There’s no doubt about it, our export controls have meaningfully slowed China’s advancement in making leading-edge semiconductors, that we’ve slowed them down. But really, the only way to win is to out-innovate them. Not to oversimplify it, but you know, I think about it in terms of a running race. Export controls are like tugging on the shirt of your competitor a little bit to slow them down. But fundamentally, you have to outrun them.
And so when I said it’s a fool’s errand, you know, it’s helpful as a speed bump. But if we want to beat China in AI, in quantum, in semiconductors, in all technology, life sciences, we have to run faster, which means more research and development, more innovation, more investments, better companies, more startups. We’re ahead of them now, and the way to stay ahead of them is to out-innovate them.
Ryssdal: I don’t know if you remember this, but maybe a time or two ago when we talked, I told you about this kid in my daughter’s high school who — I went to speak to their economic club. He was a sharp kid, and he asked me about [Taiwan Semiconductor Manufacturing Co.], which, as you know, has received billions of dollars from the U.S. government and is building a huge plant out in Phoenix that we went to go see. And he said, “Why do these companies need American government support?” And we had a conversation about that — you and I did. I guess the last thing I want to ask you is, what do you say to a kid? Well, I guess he’s now a sophomore in college. What do you say to him about the future of the American economy in a politically perilous time, when the rise of the rest, specifically China, is a very, very real issue?
Raimondo: I would say to that kid, “America is the best country on the Earth, the safest country on the Earth, the strongest democracy.”
Ryssdal: OK. Wait, OK, sorry, with all possible respect, give me the real answer, not the platitudes, right?
Raimondo: No, but this is what I’d say.
Ryssdal: You and I have talked enough over the years that I think I can poke you in the eye a little bit.
Raimondo: You can, but this is what I think. But what I would tell the kid, look, it’s the best place. Where would you rather be, Kai?
Ryssdal: Nowhere else, nowhere else. But, but I’m not the one on the spot.
Raimondo: But what I would say to him, is, “It’s the best place there is.” But I would tell him, “You better get in the game.” I don’t know this person, but maybe go get a job at TSMC, or maybe get a job at Intel, or go start your own company, because the only way that we can stay in the lead is to build the companies that everybody wants to work at, build the technology that keeps us in the lead. I might also tell them to run for office because we need good, publicly minded people, not self-interested people, to run for office if we’re going to solve the biggest problems in front of us.