Oren Cass on the end of the free ride

For years, Oren Cass was a voice in the wilderness, calling for America to rebuild its industrial might and highlighting the central role tariffs would play in any serious plan. Today, his ideas have real traction. The Trump administration actively pursues policies his think tank, American Compass, helped shape. He joined me Friday to discuss the trade war and the path to a new American century.

The interview has been edited for length and clarity.

Beltway Brief: These last few weeks have been a wild ride for tariffs in the United States. What do President Trump’s administration and the United States more broadly need to accomplish to show they’re serious about trying to reinvigorate the American industrial base and the American middle class?

Oren Cass: There’s something we need to accomplish globally and something we want to see domestically. Globally, we’re moving on from the post-Cold War liberal order that said, “Whatever’s good for General Motors is good for America.” That if other countries hollow out our industry with aggressive export strategies, we should thank them very much for sending the cheap stuff.

And I think two things have happened. One, it’s actually been very encouraging over the last couple of years to see economists start to admit that that was just wrong. Even [former Treasury Secretary] Janet Yellen said she would “never ever” say thank you very much again.

I just did a roundtable discussion at the New York Times with Jason Furman, who used to say exports are the bad thing — you have to work hard to get the good thing, which is cheap stuff. And now he’s acknowledging that being able to make things actually matters. That’s an important shift.

The United States needs to stop trying to make everything wonderful for everybody. We need to focus on our own interests.

The second shift is just the recognition that there is no global liberal world order. If there ever was, it’s now gone. We are in a multipolar world. China is exerting its influence in its sphere, and the United States needs to stop trying to make everything wonderful for everybody.

We need to focus on our own interests. We should want strong alliances and a bloc working together on trade and security — but it’s not going to be “free.” There are going to be conditions. Everybody agrees that trade needs to be more balanced, that everybody should have a strong industrial base, and that everybody needs to hold hands and keep China out.

If we can build that bloc, the benefits we’ll see at home will be major investments in reindustrialization and rebuilding our industrial base.

BB: The first week of this trade war seems to be moving your way. Has the administration preserved its credibility in negotiations, not just with China but also with the 75 countries that have come to negotiate?

OC: That’s exactly the right question. We [at American Compass] have been quite critical of the initial Liberation Day moves.

It’s heartening to see an administration willing to acknowledge short-term costs in order to get long-term benefits. That’s the leadership we need. But in terms of specifics, there’s been room for improvement. Moving too fast, creating unnecessary uncertainty, flipping positions — those all impose avoidable costs. Now that they’ve paused and set a clearer direction, it’s a healthier model.

Even with China, I want to see high, permanent tariffs. But going from zero to over 100% on day one doesn’t help. If you’re a company thinking about moving production from China, what you care about is what the tariff will be in two years. If you know we’re going to phase up to 50%–60% tariffs, that motivates you to move. But if you’re hit with high tariffs overnight, the pain hits the very people we want to see succeed. A methodical, phased-in approach, with clear communication, would deliver more upside with a lot less cost.

BB: Could there be merit in having countries compete to get into a U.S.-led trade order, instead of going one by one?

OC: Yes, you want countries rushing to the table. But we have to be realistic. The U.S. can’t negotiate 70 agreements at once — especially when we haven’t clarified what we want those agreements to look like.

A real advantage of the 90-day pause is that it allows for staggering. If you go after 70 countries at once, each of them still has other trading partners, and we feel the pain of all the countermeasures at once. That weakens our position.

But if you stagger it — say, make deals with Japan and Australia first — you create a template. Then others see what’s coming. You delay tariffs on the ones negotiating in good faith, and if some countries stay out, then when tariffs hit them, it’s clear why. That’s much more credible and less disruptive than what we saw on Liberation Day.

And it gives companies time to look at what’s going on and ask, “What do we have to be prepared for? Who should we be betting on versus betting against?” It’s just a better way to accomplish what the administration wants.

BB: I'm getting some George W. Bush War on Terror vibes from the early announcements. It seems like the White House's messaging has not prepared the American people for what it will look like to have their 401(k) hit by a decrease in Chinese dollars being dropped into the stock market, to have housing values and other values hit by a decrease in Chinese dollars being poured into our economy.

Has the administration done enough to prepare the public for what comes next — financial market impacts and economic pain? What could they do better?

OC: The messaging needs to be much clearer. You need a diagnosis, a plan, and a case for why the costs are worth it. Without that, it’s hard to sustain political support.

Ronald Reagan did it in 1981. The U.S. had serious economic problems. Reagan and Paul Volcker at the Fed pushed us into a sharp recession — interest rates above 20%, unemployment over 10%, the stock market down. And yet Reagan won a landslide re-election in 1984 because he explained what was wrong, what the fix would require, and why it would be worth it.

That’s what the Trump administration needs now — a major speech, ideally from the president. Vice President Vance has been a very effective communicator, so it could be him. But it needs to be clear: Here’s the challenge, here’s the cost, and here’s the long-term payoff.

And yes, you're going to have the elites, you’re going to have the media, pushing as aggressively as possible the story that this is a disaster. It’s so funny, especially, to see these left-of-center folks suddenly decide that the stock market is the ultimate arbiter. I mean, you've got people like [Bill Clinton’s former Treasury Secretary] Larry Summers out there saying, “Well, here, the stock market went down. And that's essentially a perfect proxy for the well-being of society, so we can just multiply that loss by five and find out how terrible this is for the country.”

It’s absurd. But it’s also the reality of our politics. And that’s something the administration must anticipate and overcome.

BB: Do you think the president’s goal is to isolate China and build a new system — or just to strike a better deal?

OC: We’ve seen indicators on both sides.

The president’s sharpest advisers — Vance, Scott Bessent at Treasury, Stephen Miran at the Council of Economic Advisers, U.S. Trade Representative Jamieson Greer — have been consistent. They see a decoupling of the global economy. Marco Rubio, now secretary of state, has long seen it that way. Bessent even emphasized in negotiations with Mexico and Canada that he wants them turning away from China.

At the same time, you hear the president musing about [Chinese automaker] BYD building EV factories here. That suggests he still sees this as a showdown leading to a deal of some sort.

So there’s a need for more clarity. And this is where Rubio’s framing helps. It’s not about preferences — it’s about reality. There’s no pathway to a healthy trade relationship with a communist, authoritarian regime that runs a state-controlled economy.

We tried engagement for 25 years. It didn’t liberalize China. It made them more authoritarian. The only choice is to accept reality and do what’s best for America: separate our economy from China’s.

Once we do that, we can ask allies to do the same. If we can lead a bloc thinking that way, it will be a very good thing for the United States.

BB: Where can people follow your work?

OC: All of our work on trade, China, and globalization is at AmericanCompass.org. Our new magazine, Commonplace, is doing a symposium on all this at Commonplace.org. I’m on X at @Oren_Cass.

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