Gina Raimondo on How European Industry Is Getting Crushed

Summary

Odd Lots – Gina Raimondo on How European Industry Is Getting Crushed

Podcast Date: April 6, 2026
Hosts: Joe Weisenthal and Tracy Alloway
Guest: Gina Raimondo (Distinguished Fellow at CFR, former U.S. Commerce Secretary and Governor of Rhode Island)

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Main Theme and Purpose

This live Odd Lots episode, recorded at the Council on Foreign Relations (CFR), centers on the precarious state of European industry in the face of increased Chinese imports and the breakdown in transatlantic relations. Gina Raimondo reflects on her tenure as Commerce Secretary, delving into the U.S.–Europe–China dynamic, the impact of Chinese industrial policy on Europe, economic security, AI’s disruptive potential, and the challenges of building resilient supply chains and industrial policy in the U.S. The discussion weaves together geopolitics, economics, and the future of work in the AI era, offering both sharp warnings and pragmatic policy ideas.

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Key Discussion Points and Insights

1. Fraying U.S.–Europe Relations and NATO’s Future

• Context of Geopolitical Tension: Discussion opens (02:32) by referencing President Trump’s speech threatening NATO disengagement due to European inaction regarding the Iran war.
• Raimondo’s Assessment: She observes that Europe’s patience with the U.S. is “wearing thin,” citing her recent experience at the Munich Security Conference (03:14):

  “I don’t think it's that thick. … I think their patience is wearing thin with us, somewhat justifiably so.”

• Critiques the Trump administration’s approach: grievances about lack of allied coordination and execution, not necessarily the core arguments.

2. Europe’s Industrial Decline and China’s Playbook

• China’s Economic Aggression: Raimondo asserts Europe is facing a surge in imports from China, especially in key sectors (04:37):

  "The German industrial base is going to get crushed. Like, this is China's play … they subsidize, they dump cheap products into the global market … and it makes it impossible to compete."

• Asserts this is actively weakening U.S. allies and is bad for both Europe and America.
• Encourages Europeans not to "cozy up to China," framing China as distinctly self-interested and damaging to European interests.

3. Europe’s Economic and Technological Weakness

• Industrial & Supply Chain Vulnerabilities (07:04–09:35):
  • Europe lacks world-leading tech companies; is at risk of continued decline in critical sectors like chemicals and petrochemicals.
  • The U.S. should advocate for closer cooperation with European allies and not strive for total self-sufficiency. Instead, focus on diversified, ally-based supply chains.
• Quote (09:35):

  "...it's bad for America and the world and Europe that they have such an anemic technology ecosystem ... they need to act on it."

4. Political Dynamics—Allies, China, and the Costs of Division

• European Political Calculus (12:13):
  • European leaders, faced with U.S. political volatility and public insults, rationalize relationships with China.
  • Raimondo’s perspective:

    "Cozying up with China is bad for you, arguably it’s worse for you than us. Why are you doing that? ... You can be self-destructive because it saves face, but I don't think it's a good idea."

• Pitches for politicians to put the national/economic interest over personal or electoral survival (12:52).

5. Business Attitudes to China & AI (15:48–18:33)

• Most business leaders still see China as a critical market. Raimondo clarifies U.S. policy: trading with China is fine outside of strategic/national security technology.
• She draws a clear line:

  "...selling our most sophisticated leading edge chips to China ... that's a very different thing. But by the way, that is a tiny [fraction]. … I want American companies to be profitable and successful." (16:29)

6. The Real Risks and Promise of AI

• American Anxiety About AI (18:43–21:45):
  • AI evokes fear—job loss dominates public perception.
  • Raimondo is bullish on eventual job growth, but deeply concerned about the social and political transition.
  • Quote (19:44):

    “We will not do that—even if we have … the best models, the best chips, the biggest data centers—but sky-high unemployment and no transition system, that’s not winning, that’s automating America’s decline.”

• Call for Support Systems:
  • Advocates urgent development of new policies—transition and retraining systems, safety nets beyond classic unemployment insurance (27:47).

7. Practical Policy Suggestions

• Retraining, Incentives & Local Innovation (32:14–33:59):
  • Suggests ideas like paying unemployment benefits to laid-off workers starting new businesses, and requiring former employers to contribute to new ventures.
  • Predicts that AI could spark “an explosion of new small companies" thanks to easy-to-use tools (32:16).

8. Evaluating Industrial Policy and the CHIPS Act

• Bipartisanship Is Essential (40:25):
  • The survival of the CHIPS Act—despite political changes—is credited to its bipartisan support, contrasting it with the more vulnerable Inflation Reduction Act.
• Limits of Self-sufficiency (42:39–45:43):
  • Even optimistic scenarios leave the U.S. heavily reliant on global supply chains—advanced chip packaging, critical inputs, and chemicals remain Asia-centric.
  • Quote:

    “Our goal was to get from 0% of leading edge chips in the U.S. to I think 20% of global capacity by 2030. We're on path to hit that goal. But again, 20%.” (42:39)

  • Advocates for diversification rather than total domestic production.

9. The Future of U.S.-Led Alliances and the Polyamorous Trading Order

• Strategic Realism in Partnership (46:32–49:09):
  • Raimondo resists both rigid “blocks” and idealized values-only alliances.
  • Argues for practical relationships with a variety of countries—even those with imperfect records—to reduce reliance on China and secure strategic resources.
  • Quote:

    “I think we have to kiss and make up with Europe. It’s in our interest. ... We gotta work with [partners] because it’s in our interest and it’s in the world’s interest to deescalate.” (48:47)

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Notable Quotes & Memorable Moments

• On China’s industrial strategy:

  "The German industrial base is going to get crushed. Like, this is China's play ... they subsidize, they dump cheap products … it makes it impossible to compete."
  (04:37, Gina Raimondo)

• On global dependency and the U.S. role:

  "We need allies, including Europe ... [and] the global South ... pissing off all our allies, it's just not a good idea."
  (04:37, Gina Raimondo)

• On the future of AI and disruption:

  “We will not do that—even if we have … the best models, the best chips, the biggest data centers—but sky-high unemployment and no transition system, that’s not winning, that’s automating America’s decline.”
  (19:44, Gina Raimondo)

• On political incentives:

  “Their job isn’t actually to get reelected. Their job is to do the job and serve the people that elected them.”
  (12:52, Gina Raimondo)

• On diversification vs. autarky:

  “We should make the most critical things and work with our allies. ... We don't have enough people. That's inflationary. We don't have enough land, we don't have enough energy."
  (43:09, Gina Raimondo)

• On pragmatic alliances:

  "We gotta work with [partners] because it’s in our interest and it’s in the world’s interest to deescalate.”
  (48:47, Gina Raimondo)

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Important Timestamps

• [02:32] – Geopolitical context: U.S.–Europe rift, NATO concerns
• [04:37] – China’s impact on European industry
• [07:04] – Europe’s economic and technological vulnerability
• [09:35] – Why the U.S. can’t (and shouldn’t) “make everything”
• [12:52] – Political incentives and the cost to alliances
• [16:29] – U.S. business attitude to China; trade vs. security
• [18:43] – AI: threat, promise, and the need for new support systems
• [27:47] – Examples of broken U.S. systems: unemployment, retraining
• [32:16] – AI-enabled entrepreneurship: room for optimism
• [40:25] – CHIPS Act: importance of bipartisanship
• [42:39] – Realistic goals and global choke points in semiconductor supply
• [45:43] – Supply chain complexity and strategic diversification
• [46:32] – The polyamorous trading order and future alliances
• [48:47] – The case for practical, not ideological, partnerships

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Overall Tone

Candid, pragmatic, and sometimes urgent—Raimondo is frank about faults in policy and the severe implications of inaction, especially on AI and global alliances. The hosts maintain an engaged, sometimes playful but incisive approach, allowing for both deep dives and asides that humanize the conversation.

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Summary Takeaways

• The European industrial decline under Chinese competition is severe, with dramatic consequences for both Europe and the U.S. China’s “playbook” of state-backed dumping is eroding Europe’s foundational industries.
• Disarray in U.S.–Europe relations undermines both economic and security interests; cohesive alliances are essential to counter China.
• The future of work in the AI era is unknowable—but dangerous if unplanned. The U.S. must urgently invent new safety nets, training, and transition policies to avoid social disaster as industries change.
• “Making everything in America” is a seductive but unrealistic idea. Diversification with allies is the only practical path to national and economic security.
• Pragmatic alliances—even with imperfect partners—are necessary to secure critical materials and limit Chinese leverage.
• Policy must be flexible, bipartisan, and future-focused—otherwise, structural weaknesses and political gridlock will undermine national goals.

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This episode is essential listening for anyone concerned about the future of transatlantic relations, industrial competitiveness, technological disruption, and the real work of reinventing economic policy for an unpredictable era.

Transcript

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[Joe Weisenthal]

Hello and welcome to a live episode of the Odd Lots Podcast. I'm Joe Weisenthal.

[Tracy Alloway]

And I'm Tracy Alloway.

[Joe Weisenthal]

So I guess for listeners who are hearing us here at cfr, plenty to talk about. Truly do have the perfect guest with us. We're gonna be speaking with CFR distinguished fellow Gina Raimondo, previously the Commerce Secretary, previously governor of Rhode Island. So, Gina, looking forward to chatting.

[Gina Raimondo]

Me too. Thank you for having me.

[Joe Weisenthal]

There's so much. There's so much to talk about. By the way, what's the date today? It's April 1st. We always make a note of that these days.

[Tracy Alloway]

You better add in the time yet.

[Joe Weisenthal]

What time? 11:45. Because so much is liable to change by the time other people hear this episode. But I want to start. I saw a headline this morning, President Trump. He's set to give a speech tonight related to the war in Iran. And according to a report I think was a Reuters report, he's going to criticize NATO heavily. They haven't gotten involved in the war, etc. Maybe threatened to pull out of NATO yet again. And I'm curious From your perspective, you know, how thick is the ice right now between the US And Europe and how much will. How much more is there for it to thin?

[Gina Raimondo]

Yes, that makes sense. It does. It does make sense. Hello, everybody. It's great to be here. It's great to be on the show.

[Joe Weisenthal]

Thank you.

[Gina Raimondo]

I don't think it's that thick. The last time I was in Europe was, I guess, a month and a half ago for the Munich Security Conference and spent a lot of time with European ministers, military leaders, CEOs. And I think their patience is wearing thin with us, somewhat justifiably so. I don't think it's very thick. Listen, I understand the President's point. If he thinks European countries aren't pulling their weight or doing their fair share as it relates to investing in their military capacity and participating in NATO. That being said, I mean, it's not clear to me that before we invaded, we had a strategic plan with our European allies to get involved. And so, you know, it's like a lot of things with this administration, maybe not a terrible idea, but very poor execution.

[Tracy Alloway]

So I know when you were Commerce Secretary, you obviously spent a lot of your time thinking about the US Versus China technology situation. And I know you argued also that we actually need Europe when we think about that, because if we're going to have something like export controls in the US it doesn't really work if Europe doesn't come along with us. When you think about economic security in the context of, let's just say, fraying U.S. european relations, where are we headed?

[Gina Raimondo]

I think we're in a bad place. I don't think we can effectively compete with China economically, technologically, without allies. They're just too big. They're too big. They're too determined. And so we need allies, including Europe, by the way, including Southeast Asia, including the global South. And so if you were to say to me, hey, what do you think is the biggest mistake about how this administration is handling China and their China strategy? I would say pissing off all our allies, it's just not a good idea. By the way, it's not good for Europe. When I was in Europe in Munich, what I would say to the Europeans is, I know you're unhappy with us, but we're your closest ally, and it isn't good for you to cozy up to China. I mean, if you look at now what China is doing to Europe, it's terrible for Europe. The Chinese imports to Europe have surged. I can't remember the exact number, but it's like 20, 30% more imports from China to Europe this year, year to date, versus last year. The German industrial base is going to get crushed. Like, this is China's play. They run the play over and over again. They subsidize, they dump cheap products into the global market, in this case, Europe, also Africa distort the price and it makes it impossible to compete. So that's bad for America. It weakens our allies in Europe. By the way, it's bad for Europe, and that's why the ice is thinning. But my point to Europe is, okay, your feelings are hurt, but China's not your friend.

[Joe Weisenthal]

Yeah, let's talk about this a little bit more. Because this phenomenon, it's like, all right, Germany has an incredible history of chemical giants and automotive giants, obviously, and so forth. And there's a lot that gets talked about in the US Europe relationship these days, primarily centered on defense and NATO spending, et cetera. But it does feel to me like there is comparably less attention paid to just what is industrial Europe even going to be in the future? Because they don't have our tech. Right. They don't have our metas and alphabets and openais to the same degree.

[Gina Raimondo]

I could not agree more. I was the Commerce Secretary, so my focus is economic security, economic alliances, technology security. So again, I personally think a weak European economy and a weak European technology sector is definitely bad for them, but also bad for us. We want strong allies. And so when I was in Munich, while the talk was of course around NATO and their military capacity, every speech I gave a person, I spoke with Washington. I talked about their supply chains, their industrial base, the fact that it will be almost impossible them to compete if China continues to, like I said, distort the global market and take advantage of them. And particularly Germany. Talk about the chemical companies and the auto companies. The damage China is doing right now, their industrial base is significant. So I wish people would talk more about it. Of course, all the focus is on NATO. It's a shiny object. Everyone's focused on the military, which is very important. But it's just like supply chain in America. It's like the frog's boiled and doesn't know it. For decades, we allowed our supply chains to wither and atrophy. And then you wake up 20, 30 years later and you're massively reliant on China. So let's wake up today and do something about it.

[Tracy Alloway]

Yeah, the European situation, I mean, it does come up depending on what the talking point du jour is. So if it's AI People are like, well, Europe is behind in AI. And then I was reading a note just yesterday from credit sites talking about petrochemicals and saying, well, Europe is in a really bad place when it comes to petrochemicals. US a little bit more insulated and China is basically almost like 100% self reliant for some things, which is pretty amazing. If you think back to the situation just 20 or 30 years ago. When it comes to building up European strategic industry, let's say, or technology, what role do you see for the US in that? Because it feels like everyone's trying to do the same thing at the same time. The US is trying to develop its own ecosystem of either industry or strategic technology. China is trying to do it, Europe maybe should be trying to do it, but how is everyone doing it at the same time? And what should the US actually be advocating for here?

[Gina Raimondo]

We should be working with our allies to shore up all of these supply chains. Listen, I don't think America needs to be, can be or should try to be mining everything, making everything that we need. Japan is a juggernaut in chemicals. That's okay. They're one of our closest allies. Europe has had a long successful industrial base. So as long as we have some diversification, that's a good thing. And as long as we're working with allies and have allies, that's a good thing. The scary things are when we are overly dependent on one country, especially if the country is China. I personally think it is bad for America and the world and Europe that they have such an anemic technology ecosystem. And you know, there's a lot of reasons they have that it's over regulated. They don't have a capital market. They this, you know, I thought the Draghi report kind of was excellent, laid it out and they need to act on it. But my point is, you know, why can't we work more closely with Europe to shore up our supply chain? Good for them, good for us. By the way, the Philippines has nickel, Indonesia has critical minerals. There's some things we do need to work with allies. And China is all over those countries. I think the most frustrating thing I hear, and it's a political argument, and I'm a politician or former politician and it drives me bananas when I have quiet meetings with very senior people in Europe, ministers, prime ministers, CEOs, I say to them, you're cozying up with China because you're mad with how Trump's behaving. Okay, I understand why you'd be mad cozying up with China is bad for you, Arguably it's worse for you than us. Why are you doing that? And they would say, well, we feel like we have to, but you pushed us into that corner, which is things politicians say, like, okay, you can be self destructive because it saves face, but I don't think it's a good idea.

[Tracy Alloway]

I feel like there's one thing I have to push back on there. As a former European capital markets correspondent, Europe does have capital markets. They're just not as robust as the market. For sure, for sure.

[Gina Raimondo]

They're not deep, they're not dynamic.

[Tracy Alloway]

I just don't want to get angry emails from my former contacts going, they'll

[Gina Raimondo]

be mad at me, not you.

[Joe Weisenthal]

But like, how much of it is sort of classic politics. Like the people who you're talking to, like, they have to get reelected and there's one guy on their TVs who continues to insult them frequently and instigate and et cetera, and that's Trump. And there's someone else who, as far as I know, never publicly says anything negative about Europe and that's Xi Jinping. Like they have to get elected. Right. And so you can say logically, look, it doesn't long term, maybe the US Europe relationship will change and so forth. But like they were politicians like you once were.

[Gina Raimondo]

Yeah, yeah, yeah. So I hear that. I do hear that. And that's why I said, I think probably the biggest mistake of the current administration's China strategy is, is hurting our relationship with allies. I don't see a path to pushing back on China effectively unless we work with our allies. So I do. I hear you. I guess now everyone can laugh at me. I guess I still hold politicians to a higher standard. I mean, their job isn't actually to get reelected. Their job is to do the job and serve the people that elected them. And when I, even when I was secretary, I would frequently talk to members of Congress who would say, I know you might be right, but I can't be with you. I'll lose a primary. And having been on the ballot and stood for election many times and had brutal primaries, my reply is always, isn't that a badge of honor? Go down doing the right thing, be a public servant, not a quote unquote politician. But I hear it's a lot of traditional, what politics is. Hey, Fidelity, what's it cost to invest with the Fidelity app?

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[Tracy Alloway]

politics aside for a second because I imagine it's going to recur in this conversation when you talk to businesses so executives, I mean a lot of them still see China as the second biggest economy in the world, which it is, and this huge destination market. And even now when it comes to maybe more sensitive technologies like AI, we are seeing people. For instance, a lot of big businesses in the US opt to use something like Quentin, the Chinese open source model. How do you talk to executives who are maybe worried about their share price, worried about the bottom line and tell them like, well, wait a second, maybe there are other reasons not to engage with China in this way.

[Gina Raimondo]

Yeah, look, I actually, I mean again, I think trade with China is a good thing. I think trade is a good thing. It creates jobs in America. It allows our companies to compete. I think our trading relationship with China is, you know, it's hundreds of billions of dollars. The vast majority of that is in products that have nothing to do with national security. In fact, when I was secretary to make this point that trade is a good thing, I started an export promotion initiative for health and beauty products. Like my theory was no one could say lipstick, perfume, blush, eyeliner is a national security issue. If we sell more of our stuff to China, it makes jobs in America. Also, I do think engagement, commercial engagement, diplomatic engagement does reduce the probability of conflict. So I'm for All that. The challenge is in selling our most sophisticated leading edge chips to China or certain AI or hypersonics. When you get into that, well, then that's a very different thing. But by the way, that is a tiny. As far as I'm concerned, the more stuff American companies can sell to China, that doesn't hurt our national security interest is a good thing. I want American companies to be profitable and successful.

[Tracy Alloway]

Right. But if you have large corporations in the US who are using an open source model developed in China like Quinn, is that something that would concern you?

[Gina Raimondo]

I mean, it's open source. It is, as you say, it's open source. It's hard to put that genie back in the bottle. And so I'm not sure exactly. I think that's less concerning. As long as there are other controls. Now, these companies have to have their own data controls, privacy controls, cyber controls, et cetera.

[Joe Weisenthal]

Let's talk about AI a little bit more because you've been writing about it, you've been talking to people about it. What are you working on? What have you been working on? What have you been up to?

[Gina Raimondo]

I'm remarkably busy for someone who doesn't have a single job. Well, since Mike Froman, who runs the Council is there, I'll say I spend a lot of time helping the Council on Foreign Relations. Actually, in all seriousness, we put out a report that I'm proud of as it relates to economic security and it had to do with AI and the whole point of it. I strongly believe trying to slow China down is a fool's errand. Let's invest and beat them by innovating faster in core technologies like AI Quantum and biotech. The thing I'm spending the most time on is the issue of how do we get through the transition to an AI economy. And I want to talk for just a second on this. I appreciate you asking. So here's how I see it, and maybe your listeners will push back or like it. Right now, most Americans, when they hear AI, they get afraid, right? The vast, vast majority of Americans, AI equals anxiety. I'm going to lose my job. I get that. You know, people are scared. I think it would be a huge mistake to like retard our AI progress with over regulation. Just talked about China. I want to win the AI race. I want America to lead the AI world. And I think when we get to the fifth or sixth inning of this AI revolution, whatever you want to call it, I firmly believe there will be more jobs. I do. I think there'll be new industries, new companies. New products and services. I'm an optimist. I am pretty worried about getting from the first inning to that inning. So what I am spending my time on is how do we create support systems, transition systems, incentives for companies not to just do these big rifts. Because here's my view. Yes, we want to win the AI race. Yes, we want to win be the leader in the world on AI. We will not do that. Even if we have. If all we have is the best models, the best chips, the biggest data centers, but sky high unemployment and no transition system, that's not winning, that's automating America's decline. So as much effort as we're putting into winning the chip, AI and data center race, we better putting that same amount of urgency, effort and innovation into coming up with systems to cushion us through the transition. Otherwise we won't win. We won't win. Civil unrest, political violence, 15% unemployment rate, that's not winning the AI race. So let's get practical. What are the new policies and new systems and new training and new incentives for companies to get us there so we can win.

[Tracy Alloway]

I know you're thinking about this now, but do you have any idea of what that could actually look like? Because I think I don't often sympathize that much with large tech companies. But if I'm neither do I, right? If I'm like a meta or a Google or whoever, and I'm being told that not only am I in an existential race with every other tech company out there to win on AI, but I am also in an existential tech race with China on behalf of the us and also I now have to think about the social implications of what I'm doing. And maybe I have to think about ways to either slow it down or manage it in a better way for society. That's a lot to put on a private company. Yeah.

[Gina Raimondo]

By the way, I don't think it should just be put on them. In no way am I saying, by the way, I mean, I'm not sure why we would blame them. I mean, if they create a new technology and every company in America adopts it, who do you quote, unquote blame? I wouldn't put it in terms of blame like I love it that American companies are winning the race, are leading. We have that. We do, we do. We design the best chips, we have the best models. That's a great thing. I just think this is a all hands on deck moment for the government at the state, federal and local level, for every company in America for policymakers, for AI companies to say, what does it really mean to win the AI race? Because I don't mean winning isn't just innovating the technology at breakneck speed. If you create, you know, incredible social, political and economic unrest, you know, like agents don't buy things. Every company needs human beings with money in their pocket to buy things. This is in their interest too. So I think we just have to come together and create different set of incentives. I don't even right now you may not agree with me. If you're the CEO of an American company and you fire however many thousand people, it's a little hard to blame them because every incentive in our system says your job is to maximize short term share price. So I think it's time to experiment with some new policies that align incentives to win. I also think this, and this is my view, I think China with climate change, with a lot of things with say, pulling hundreds of millions of people out of poverty. China said industrialize, create the pollution, we'll clean up the mess later. They could be doing that with AI that doesn't work in America. In a democratic society, putting tens of millions of Americans out of work precipitously will create the end of democracy, will not win the AI race. And so we just got to get to work and be innovative.

[Joe Weisenthal]

You know, these comments that you make about potential civil unrest, 15% unemployment, end of democracy. It strikes me that the only other people that I hear really talking about this seriously are the heads of the major AI labs themselves, who seem very attuned to this risk. Setting aside European politics, setting aside politicians, like just domestic American politicians, do you think they're sufficiently honed in on the risks that you're thinking about right now about the potential for domestic destabilization as a result of AI in a fairly short period of time?

[Gina Raimondo]

I do, but I think they're overcome with and seized by anxiety and fear and not efficiently seized by, okay, what are we going to do about it? Yeah, I mean, look, I talk to a lot. I know, you know, most of the governors having been a governor and on both sides of the aisle, what do they hear from their constituents? Fear. Anti data center.

[Joe Weisenthal]

It manifests itself in the anti data center stuff. And that obviously has taken off and there's a plural. But what you've been talking about is like, that's not going to cut it like in terms of like, yeah, so

[Gina Raimondo]

like what should they be doing? The question everyone says is, okay, what are the new jobs? The only people who know the answers to that, to the extent anyone does, are companies that are using the AI to grow regular companies and AI companies that are developing the new stuff. The number one thing is how do we incentivize them to really lean in, to start investing some of the gains that they make from AI and efficiency into new job creation right now. And my view for a long time has been post high school education in America mostly doesn't work. It mostly doesn't work. You can argue with me about it. That's my long held view. I was a governor who oversaw colleges. A lot of people who start college don't finish. They wind up with a degree, a bundle of loans, and then become a barista or something like that.

[Tracy Alloway]

I became a podcaster.

[Gina Raimondo]

You became. Well, you know, you couldn't get a job at Starbucks.

[Tracy Alloway]

People think I'm joking. I dropped out of Columbia. I don't think I've ever said that publicly.

[Joe Weisenthal]

Oh really?

[Gina Raimondo]

Yeah.

[Tracy Alloway]

After two weeks I was like, I can't believe I'm spending this much money.

[Joe Weisenthal]

And that was wise and I left.

[Gina Raimondo]

You see, you're smart. That's. You're smart. But anyway, so what was my point? Like, let's go people.

[Joe Weisenthal]

Columbia Journalism School. You got your undergrad?

[Tracy Alloway]

Yeah, I did. Undergrad.

[Joe Weisenthal]

Yeah, that's what I'm saying. You did, you, you're completed. I just don't.

[Tracy Alloway]

This was a mess.

[Joe Weisenthal]

You're like creating some big myth of like.

[Gina Raimondo]

No, no, no.

[Joe Weisenthal]

Okay. You like have a regular degree.

[Tracy Alloway]

Thank you for the fascinating, Joe, but

[Gina Raimondo]

by the way, who cares if she didn't.

[Joe Weisenthal]

No, no, no, it's great, it's great. I just want to, you know, good job.

[Gina Raimondo]

So I think, you know, we have so many systems in this country that were just created for a different time. Like truthfully, I'm excited about the potential of AI and how productive and healthy we could be using it. The thing that scares the out of me is the systems in America that are. Unemployment insurance doesn't really help white collar worker if you make six figures a year. Unemployment insurance, it's not that helpful. We have really no. What I would call transition insurance to get from subsidy or something, wage subsidy to get from one job to another. Adult education is essentially either non existent, poor quality or stigmatized. Companies have precious little incentive to redeploy people instead of just laying them off. So I'm highly interested to work at the state and local level where things can happen with employers who I would argue have the most to gain and governments to get to the business of trying new things. And by the way, we can. America rises to the challenge in times of crisis. Why do we have unemployment insurance? Because we had the Great Depression. Why do we have the GI Bill? Because we had a second World War and we wanted to shove everybody to college, and it worked. Ten times as many people go to college today than they did then. Let's get ahead of this crisis and do the change that's necessary now so we can thrive in an AI economy.

[Joe Weisenthal]

When you talk to businesses, or particularly local businesses or small businesses, when you're doing your work at the state level, et cetera, we know the polls about AI and they are, as you mentioned, they're very dismal. But other entrepreneurs, other people who are not at AI companies who are right now today very excited about what AI can do for them.

[Gina Raimondo]

Say that again.

[Joe Weisenthal]

At the non AI labs, like just the companies that are, like, using AI tools. When you go around, big or small, do you encounter a fair number of managers, CEOs, small business owners, who are excited about what they're able to do now with the technology?

[Gina Raimondo]

Yes. Yes, I do. I'm spending some time working with the former governor of Indiana, Eric Holcomb, on this issue. And he and I worked together when we were governor. So anyway, last week we spent some time in Indiana talking to people. He organized a couple of roundtables to talk to people. He was amazing. To me, they were mostly small business owners. Okay. It was incredible to me hear how optimistic they were. You know, I'm using AI and I've doubled my business. I'm able to be so much more productive. A woman providing healthcare consulting services said, I'm able to serve a lot more customers and I haven't raised the price. Big company CEOs who I also talk to, interestingly, big company CEOs are not as convinced as the AI company CEOs that they're going to be laying off huge portions of their workforce. They think it takes time. Big enterprises don't move on a dime. And when a lot of CEOs I talk to say, yeah, we're going to cut, we're going to cut over here because we want to grow over here. That I think could happen. We're going to cut here to grow here. So it's a mix. It's a mix. No one knows. I think anyone who tells you they know is either delusional or lying or something in the middle.

[Joe Weisenthal]

Yeah.

[Gina Raimondo]

Nor do I know. Okay. But what I do know is we're not going to solve the problem by admiring it and being Afraid we're not going to solve the problem by stopping AI innovation. We're sure as hell not going to stop the problem by paying every American to stay home and not work. We're not going to solve the problem by giving business a free ride. Like, get in the boat and let's go and fix it.

[Tracy Alloway]

Yeah. We have been asking everyone on the show who says that new jobs are going to be created as a result of AI, what those jobs would actually look like. And you're absolutely right. No one seems to know at the moment. So I won't ask you that question because you already said that you don't.

[Gina Raimondo]

I have one little theory.

[Tracy Alloway]

Okay, go on.

[Gina Raimondo]

I do have one theory, which again, I'll also say I don't know, but I have a theory. I think you could see an explosion of new small companies. And I'm hearing that from a lot of people it's much easier to start your own business because of AI tools.

[Joe Weisenthal]

Yeah.

[Gina Raimondo]

So, like now lots and lots of people make the living with a restaurant or a coffee shop or whatever. I think it's possible we see a real explosion of online, like new services, new online products, because people can start a business with AI. So let's say I'm right. Like, let's say we do the work and this turns out to be a decent theory. Okay, so then what do we do about it? How about we create an initiative at a state or local level where we say, hey, if you're a call center worker, you're an accountant, you're going to get laid off. Here's a new initiative. We're going to allow you to collect unemployment insurance while you start your new business. Plus we're going to give you a subsidy to help start that business. Plus, the company you just got laid off from is going to kick in. I don't know what. A little bit more of a severance help you to start your job. Like, we have to get from here to there and we have to start experimenting with some new stuff.

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[Joe Weisenthal]

Yep.

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lot of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions. Resolving 94% of common questions. Not noise proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business.

[Tracy Alloway]

IBM, since we're on the topic of AI and since you are the former commerce secretary and you instituted a lot of the chips controls that Joe and I spent many years talking about trying to understand. Yeah. I'm really curious, but when you were instituting those controls, did you have AI coming down the line, like so quickly in your mind, or were you thinking about AGI? Or with the benefit of hindsight, were you right?

[Gina Raimondo]

Yeah, yeah, yeah, yeah. I mean, define right. Like I think we were like more right than wrong in the world of non perfection. I did. Now you can choose to believe that or not, but I don't know if any of my former team is here. A lot of people would say, A lot of people would say to me, hey secretary, you're shoveling tens of billions of dollars of taxpayer money into the chip industry. The chip industry is famously cyclical. Are you worried that right when you put this money in, there's going to be a down cycle in the chip industry? And I would say then I don't think so because of AI. Now I would say years Ago, I would say at that time, different now. I'd say only about a third of American businesses at that time were even in the cloud. They're still using Excel and on Prem Storage saying we need a lot of chips for traditional data centers and then on top of that, AI. So I always felt that the bottom wasn't going to fall out of the chip industry because of AI on the controls. Yeah, I had a thought that the AI race would be the race and I wanted to win it. So like I say, throwing sand in the gears of China's operation felt like a good thing to me.

[Joe Weisenthal]

It's pretty incredible. On the cloud thing you mentioned, we did an episode recently and we were talking to an executive and he mentioned something about the length of time of a recent cloud migration project they were doing. And in my head I was like, it's 2026 and large companies still have. We just sort of take it for granted that everything is going to be in some cloud aws.

[Tracy Alloway]

That was Marco, Argenti, Goldman.

[Joe Weisenthal]

Yeah. And so to this day, there's still huge cloud migration projects that are happening,

[Gina Raimondo]

which is pretty extraordinary. Yeah, I'm not certain we're going to see this 50 million people laid off tomorrow.

[Joe Weisenthal]

Like, yeah, that's a good indicator of how slow these things can move.

[Gina Raimondo]

Pick your big favorite big company. Turning those company is like a little bit like government. You can't turn on a dime. If you have companies that are moving from Excel and all these different databases to a fully agentic system, it takes years, not months, which means we have a minute to figure it out. Now, Gina, what are you most worried about? I'm most worried that we do what we've often done, which is wait for the crisis before we have some solution, wait for mass unemployment before we get serious about preparing. And well, you know what? I think if that happens, I think there will be regulation to stop AI and I think it'll be bad.

[Joe Weisenthal]

Let's actually talk a little bit more about the CHIPS act since we have you here. And one of the concerns, it's like, okay, people would say this because this is a type of industrial policy that we haven't done in a while in the United States. And one of the questions is whether our political system allows for that because we had an election and the incumbent party lost and then new people came in, et cetera. Where do sort of like looking back now, those CHIPS investments that were made, can we say they survived the transition? And how did the transition affect the trajectory of this broader endeavor to have more domestic Semiconductor manufacturing.

[Gina Raimondo]

Yeah. My biggest lesson from the CHIPS program is when you do something like that, make sure it's bipartisan. It has mostly survived actually. Now TSMC is making leading edge chips in Arizona the same way they are in Taipei, Taiwan. And they're going to expand. And this administration is like helping, not hurting that the same thing with intel and all these other companies. So it is surviving. And I think it's cause it was bipartisan. There were a lot of leading Republican senators who really wanted it to happen. And I'm in contrast to say like the Inflation Reduction act, which you could argue was also a little bit of industrial policy insofar as it was meant to accelerate our path to a cleaner economy. That was immediately undone because it was passed on partisan lines. Meanwhile, we couldn't have gotten it done otherwise. So in no way am I criticizing, I'm just saying I learned the reality that if we have any hope of having continuity, it better be bipartisanly popular beginning, middle and end. And my team, to whom I give great credit, pushed me to spend a lot of time on Capitol Hill even after we got the money to constantly update Republican members of the Congress to maintain its popularity. And I think that I learned a big lesson.

[Tracy Alloway]

How should we evaluate the success of the CHIPS Act? Because the headlines nowadays are all about Iran and the closure of the Strait of Hormuz. And everyone's minds are currently very focused on choke points in the world. And one of those major choke points would be if anything were to happen between China and Taiwan. And so I'm very curious, if we had a situation like that, would the US be self sufficient? I'm not sure if that's the right word, but self sufficient. Self sufficient in its supply of chips. What should we be aiming for here? If we're thinking about global choke points

[Gina Raimondo]

for strategic tech, this is the question, when you say did you get it right? I'm like directionally, yes, perfectly no. The answer is no, this is not going to happen. But if theoretically, possibly next year China has Taiwan and they cut off supply of our chips, I don't think either of those things would happen. But theoretically it would be like apocalyptically bad, right? Like that would be very bad. We're producing some chips in the U.S. our goal was to get from 0% of leading edge chips in the U.S. to I think 20% of global capacity by 2030. We're on path to hit that goal. But again, 20%. So that's why, number one, I think we need to de escalate, have stability and A floor under our relationship with China. It's good for them, it's good for us, but also we have to work with our allies. We cannot. It is not possible. One of the arguments I used to get into with my old boss, President Biden called me gov. He's like, gov, why can't we make everything in America like the President cannot? We don't have enough people. That's inflationary. We don't have enough. It's not a good goal. We don't have enough land, we don't have enough energy. We should make the most critical things and work with our allies. And I had that argument with them maybe 10 times. I lost every time. No, because he's like, I don't like that I'm going to make everything in America. But this gets to my point, like, not to alarm you further, but okay, let's say we did great with the CHIPS Act. We're on our path. We're making memory chips here. Everything here. We still don't really do what's called advanced packaging.

[Joe Weisenthal]

Yeah, they leave. Right. We make the chips and then they head out. Yeah.

[Gina Raimondo]

Not to be too much of a nerd here, but no, this is important. Pack just, you know. And by the way, packaging isn't put the chips in a box. Packaging is how they layer the chips, which is incredibly sophisticated to get enough compute on a chip. Even though we're making them in Arizona, they go back to Taiwan for packaging problem. Gotta get that in America. I think it's 30% of printed circuit boards we import from China. Almost all of the chemicals, substrates inputs that go into making chips come from China or Asia. If you did like a supply chain breakdown of an AI data center, the cables, the wires, the chemicals, the this that I think you'd be not happy with. How much of that still comes from China. Okay, so what do you do about it? Diversify sufficiently. Diversify sufficiently here and with allies so that China doesn't have so much leverage over us. That is the thing.

[Joe Weisenthal]

We did an episode, I think, late last year. Mike Froman, who is in the audience, we chatted with him and I don't think he expected us to turn the title. He had one sentence that then we used as clickbait and turned it into the title. But he described the emerging polyamorous global trading order. And I thought that was a very compelling word to describe all sorts of on the fly, different arrangements. When you think about where we should be going in the future, assuming this administration will continue to antagonize allies, should the Goal really be to just build some clean blocks again, build some clear blocks. Not polyamorous trading, but rebuild unambiguous partnerships with clear lines and clear borders.

[Gina Raimondo]

I don't want to disagree with Mike, but he didn't.

[Joe Weisenthal]

I'm not saying he was advocating that. I think he was describing the direction that things seemed to be going.

[Gina Raimondo]

What would the opposite of polyamory be? In other words, monogamous?

[Joe Weisenthal]

Yeah.

[Gina Raimondo]

No, not monogamous. Except in marriage. I'm not for that in this example, but in case my husband's listening, I'm strongly for monogamy in other parts of life. I think it's more like we need to be more practical and get along insofar as we can keep commerce going, avoid kinetic conflict, and have a measure of national security. For instance, as secretary, I frequently advocated within our team a closer relationship with Indonesia and the Philippines for nickel or other countries with cobalt, et cetera, and was frequently pushed back on that. You know, those countries don't hew to our labor standards. They don't hew to our environmental standards. They're in China's backyard. True, but we don't live like the world of love is different. Rationality can maybe go out the window. This is the real world here. I would rather have a relationship. You have to balance. You have to balance this question of balance and practicality. Fine. You don't want to work with Indonesia because you don't like that. I hear that. I hear that. Is it better to buy everything from China? I don't think so. True. I think we have to kiss and make up with Europe. It's in our interest. Yes. We have stronger relationships with countries that share our values, that are democracies, that have a rule of law. I don't think in my lifetime we're ever going to have a close relationship with China, Russia and North Korea, and we should call it as it is. I think we have to work a hell of a lot harder to increase our economic ties with Southeast Asia, with countries in Africa, with countries in Latin America, and B, you know, maybe not. We don't have to love them. We gotta work with them because it's in our interest and it's in the world's interest to de escalate.

[Joe Weisenthal]

Nina Raimonda, thank you so much. That was fantastic.

[Gina Raimondo]

Thank you.

[Tracy Alloway]

All right, shall we leave it there?

[Joe Weisenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the All Dots podcast. I'm Tracy Alloway. You can follow me, Tracy Alloway.

[Joe Weisenthal]

And I'm Jill Wiesenthal. You can follow me at the Stalwart. Follow our guest Gina Raimondo Naraymondo follow our producers Carmen Rodriguez Ermenarman dashiell Bennett at Dashbot, Kel Brooks Kellbrooks and a big thank you to CFR and for more Odd Lots content go to bloomberg.comoddlots we have a daily newsletter and all of our episodes. You can chat about all these topics 24. Seven in our Discord, Discord, GG Oddlaws

[Tracy Alloway]

and if you enjoy Odd Lots, if you like it when we do live events then please leave us a positive review on your favorite podcast platform. And remember if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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