Bulwark Takes - This Scott Bessent Interview Got Weirder by the Minute

Episode Date: October 11, 2026

This episode is a little taste of Receipts, Catherine Rampell’s brand-new show from The Bulwark, where she follows the money, cuts through the economic spin, and exposes who’s really paying the price for Trump’s policies. Subscribe to Receipts wherever you listen to podcasts: Apple Podcasts:  ⁠https://podcasts.apple.com/us/podcast/receipts-with-catherine-rampell/id6807470569 Spotify:  ⁠https://open.spotify.com/show/1O2Z2akwyonpAsbxyMqBTV Scott Bessent thinks he’s the smartest guy in the room, but his disastrous financial record and increasingly strange public statements tell another story. Catherine Rampell and Sam Stein dissect the Treasury secretary’s jaw-dropping Axios interview, then Catherine talks with an American cheesemaker whose business has been hammered by Trump’s trade wars, supposedly designed to protect farmers like him.

Hey guys, me Sam Stein. I'm managing editor at the Bullwark and I recorded an episode of Catherine Rampel's new podcast receipts. We talked a lot about Scott Bessent and his crazy interview he did with Axios, where he simultaneously came off as one of the most hubristic members of the Trump cabinet, but also the most insecure. And also talked about how straight women love him, even though he's gay. We haven't seen that type of combo since my last conversation with Tim Miller. So you're going to want to catch that. It was a great conversation with Catherine. He also talked about the state of the economy, because that's what she talks about on her podcast and how all of Bessett's interventions have really not worked.

And how we shouldn't be totally surprised because in actuality, his business history, prior to joining the administration, wasn't that all that great? Now look, Catherine's got this podcast. It's awesome. It's got its separate feed. It just recently launched. I would highly, highly encourage you to check it out. It's available on Apple Podcast, Spotify.

YouTube and more, basically anywhere you can listen to podcasts, you will find it. You can also get it on our website, theborek.com slash receipts. That's the bulwark.com slash receipts. Check it out. Subscribe. Give it a like. Tell all your friends and family. We want to jump up on those podcast rankings too.

So we appreciate all your help with that. And now, enjoy the episode. Hey, everyone. Welcome to Receipts. I'm Catherine Rampel, economics editor here at the Bullwork. We have a big show. show today. It's a double header. Sam Stein is going to join me to talk about Scott Besson's interesting interview recently with Axios. That's Bessent, our Treasury Secretary,

waxing on about how appealing he is to women. He is one of the well-known gay members of Trump's administration, but he wants to talk about how the ladies like him and how he does not regret saying I am the house. Later on, I'm also going to speak with Mateo Keeler. He is the owner of Jasper Hill Farm. That's a cheese company in northern Vermont. We're talking with him because Donald Trump said he was going to save the U.S. dairy industry from our big, bad bullies to the north, the Canadians who are being so mean to our U.S. dairy industry. Mateo says otherwise that, in fact, the trade wars with Canada and with Europe and everywhere else in the world have actually devastated dairy farmers in the United States. But first, let's chat with Sam.

Sam, I want to get into some of this peculiar interview that Treasury Secretary Scott Besant gave recently. Let's play this first clip about whether he regrets some of the more hubristic things he said about his interventions with the bond market. Let's play that. Last month you told the markets, I am the house now. They bet against you at their peril. Do you regret saying I am the house now? No, because look, the health doesn't win every hand.

The house plays the percentages. And, you know, like, look, that I, maybe they hurt some fragile egos on Wall Street that I always had respect for the market. And, you know, I always tried to look and think, like, what's the move after the move that if you have an ego, you lose a lot of money. But the market slapped back. No, it didn't. How did it slap back?

Rates went up, but oil went up. I could say, okay, yesterday we had the first full allocation since we have expanded our treasury buybacks and rates collapse. There's nothing causal there. It was coincident. The Financial Times, probably your favorite, paper said Bessent fails to break fever in U.S. bond market. What did you learn from that? Well, I learned that the Financial Times is anti-American, anti-business.

And they have a fever. They're constantly trying to create a problem for the U.S. But let's leave that disgrace publication of London aside. Yeah, this is an interesting way. I mean, there's a lot here, right? This is an interesting way to describe the FT. which is one of the premier financial, very capitalist, very pro-business publications in the world. It's woke.

It's woke. Clearly. Clearly. Yeah. I mean, that salmon-colored paper that just tells you something's up there. Yeah. The idea that the FT is anti-business and that's the only reason that anyone would point out the fact that Scott Besson's attempts to bully the bond market or cajole the bond market into reducing rates were unsuccessful. The only reason they would

ever describe it that way is because they're anti-American and anti-business. What else did you hear in those comments just now? Well, it's like a lot of things with the Trump folks. It's a lot of projection, right? I mean, accusing everyone of having fragile eagles and being hubristic while you're calling yourself the house and defending it is a little bit of, you know, a little ironic, I suppose. He's interesting character, right? Because I, and you know more about this than I do. But the aura about him is that this is a successful businessman who really speaks to Wall Street, but also can communicate with Trump. And so he bridges these two worlds, because obviously Trump, while he fashions himself to be a stoop businessman, is not. And yet, Besson's history is not all that particularly

great, right? Like, he, what was he lost 90% of his funds when he was running a hedge fund? Yeah. And I think, you know, there are always going to be some data points you can look at and say, ah, see, I was right to say on the house. But I think in the aggregate, if you look at the current macroeconomic situation, it's pretty bleak. And I'm not just looking at the data around jobs numbers, which was fairly putrid when they came out on Friday. But you look at, you know, I don't know, the 10-year treasury. It's what is it like over 7, 7.3 now. And then mortgage rates, the 30-year-t fixed.

I mean, I'm looking at this now. It's 7.43. Like, there is clearly a hold being taken on credit in this country in a way that I think is hard to argue with. And I'm sure he has a number of different things he can point to probably on the stock market. But by and large, it does seem like his interventions have not done what he wanted to do. Yeah. What's interesting here to me is that the reason why he boasts about his, financial market prowess that you know that that that he was the one who's who thought multiple

steps ahead has to do with this very famous bet that he encouraged george sorrows and um stan druck and miller to take back in the 90s against the pound uh that there was a bet at the time that the bank of england was trying to basically like do something that markets did not want them to do, that market fundamentals did not want them to do, that they were like going to try to do what they could to prop up the value of the pound. And ultimately at the time, a very young Scott Besson was like, they can't do it. Let's bet against them. And he was right. He seems to fail to understand the parallel today. This is like a very, very similar situation today. Yeah. where back then the house was the Bank of England and markets were right, as Bessent learned, made a lot of money at the time.

Markets were right to bet against it. And now the roles have reversed. And he seems to fail to recognize that he is trying to do a similarly futile experiment or effort, whatever, to prop up the value of bonds and therefore to push down the rates. on those bonds and the market bet against him and seems to have won. He's like, oh, no, you know, the house doesn't always win. Whatever. He said that. What did he say?

He said the latest offering was all allocated. So is there more flexibility there than we're realizing? Is there more money willing to buy U.S. bonds? Because it's been a little roughdown. Yeah. He, he has suggested that there is other money that he could use. There's been reporting. I don't remember if he's officially confirmed it that they might use the Treasury's

general. account to try to buy even more bonds. That would be like, where are they getting all this money for us? Every day. It's like we got two million, two billion here for like Medicare payments that we're going to send to retirees. And obviously the $1.3 trillion for the $5,000 dividend. I mean, it's like money is just coming from accounts that I think we didn't know were the so so ripe and plush. Yeah, I know. Some of this is magic money that may never materialize. Some of it may be. illegally diverted.

Jonathan Cohn and I had a discussion about this earlier, about some of the money that's like going out from to ACA enrollees, marketplace enrollees, may be illegally diverted from another pot of money. Some of this stuff may never happen. In the case of the Treasury General account, this is supposed to be like the pot of money from which Treasury pays its bills.

I don't know the legalities of whether they can siphon that money off to try to prop up the bond market and push down bond rates. I don't know the legality of it, but it certainly seems unwise at the very least, particularly as we are approaching the debt ceiling. And it might be useful to have some flexibility around your... When is the debt ceiling deadline? Do we have a rough idea? Later this year is when we will officially hit the debt ceiling. But then they can move money around. This is what normally happens. Right? You have a little runway.

You have a little bit of runway where they like engage in some creative accounting, basically, to delay actually defaulting on our debt. And that gives us a few months. I don't know. That's called the X state when we were like actually, actually run out of money. Here's a good thing why people should not be worried. Because when a Republican is president, the debt ceiling gets raised with little drama. When a Democrat is president, that's not true. It's always a lot of drama.

So Trump will be president. He will demand that the debt ceiling be raised. and you got to imagine it will. So, I don't know. Come on. This is a pretty unruly Congress. Yeah, but it usually plays out that way. Well, I hope you are right.

I certainly hope you are right. I think that we will have less runway either way for them to, for members of Congress to figure out how to be right on this issue. If Bessent is, you know, stealing from, like, the money that's been socked away under the mattress just in case of a rainy day. But this is, this is not the only interesting thing that came out of that interview, by the way. So there was also this bizarre exchange about Besson's sexuality.

And I don't know if we have it. Bizarre is one way to describe it. Yeah. It was very bizarre. You said President Trump chose me because he believes I'm the best candidate, not because of my sexual preference or your green eyes. Exactly. So I, and I think that's one of the reasons we have such a great team that, you know, The president makes his decisions all the time. You know, he'll occasionally tell you, tell me, you're breaking Melania's friends' hearts. They see you on TV and they want an intro and we have to break the news.

I don't know if we have the rest of that clip, yeah, but he talks about how, yeah, I know he's a lady killer right there. He also talks about in that interview, he says, well, Donald Trump chose him not because he's gay or in spite of the fact that he's gay, that the good thing about money management is that there's a scorecard and that, you know, it doesn't matter what your sexual orientation is. You can see whether somebody performed well or not because you can see whether they made money. And the irony is, again, he made money in the 90s when he was working with Stan Drucken Miller and George Soros.

And then when he struck out on his own, as you point out, he lost 90% of his funds valuation. So if there is a scorecard on his performance as a money manager, it doesn't look so great. But again, there is like no self-awareness about any of this. No, and I got to say, we have a pretty big community here at the Bullwork, a lot of readers from different walks of life. So if you happen to be one of Melania's crestfallen friends who's just devastated to discover that Scott Besson is gay, feel free to just, you know, hop into the mentions and let us know. We would love to hear why it took you so long to discover that Scott Besson is gay.

Yeah, yeah. But hey, you know, Scott Besson, I have heard. I want Scott Besson's confidence. I want that confidence. That's incredible stuff right there. I'm the house. Malani's friends all love me. Like, what is this guy?

He's great. I have a great scorecard. Oh, my scorecard's fantastic. Yeah, that's about the fact that I lost 90% of the value of my fun. You know, one of the other things that I have often heard about Scott Bessent, besides his major confidence, is his temper. And there has been a bunch of reporting about how he has, I don't know if he's picked fights, but he's engaged in fights that either became physical

or became close to getting physical with- Didn't he almost throw it on with Bill Pulte or something like that? Bill Pulte with Elon Musk. I don't know if there was a third one. Yeah, but there have been a few cases that have been reported where he has, like, threatened to beat up various other members of the administration. And I think he was even asked about it in one of his Senate testimony hearings where he was asked, like, were you going to beat someone up? He's like, I said I was going to kick his ass. I was like, okay, I guess this is how the members of the Trump cabinet settle their differences.

This is very vintage Janet Yellen. And she's the same thing. Yeah. During Senate hearings. Yeah. Yeah, totally. Janet Yellen, definitely a famous brawler. Famous brawler.

Here is what Scott Besson had to say when asked about that record. In talking to administration officials for this interview, two themes kept coming up. One is they said you're the most competent cabinet member. Other people said you the most volatile cabinet member. What kind of person sets you off? Well, let's go back. First of all, I think, We have a great cabinet.

And I think this, the president's assembled a different kind of cabinet that when I have a question on the energy to be able to talk to Secretary Bergam, Secretary Wright, both was substantial experience. And look, I don't think I'm the most, believe me, I'm far from the most. Well, you've joked that dueling among treasurer's good back to Alexander Hamilton, you have had some heated confrontations. I would say that I stand my ground like Alexander Hamilton fired if fired upon. And I always point out, did not end well for treasury the Alexander Hamilton Aaron Bird dual. So my goal is not to duel, but it is to stand my ground. And look, if I think somebody, if I think someone is not following what the president wants, because I am here to do what the the United States wants and is not trying to do what is best for the American people.

So fired when fired upon, chis a warning there. Yes. So he should misunderstands. I think he misunderstands how a duel works. Can you explain it to him? Well, so you don't wait until you get fired upon in the duel. You turn around and then you shoot. Yeah.

That's how I understand dueling. Yeah. Well, I don't know, a story of Alexander Hamilton. He did not fire when fired upon. Yeah, that was. Yeah, did not work out so well for him. Okay. But I do like that he says that he's really only there to defend the honor of what the president wants and the American people.

It's chivalry. That's the dueling part of this. It's just chivalry. He is not just a hothead who's threatening to kick the ass of, various other members of the administration, he's just really there for the common good and for the MAGA agenda. I will say this about him. He, for someone who's never been involved in politics prior to this, as far as I know,

he's definitely kind of adopted more of a political persona, right? Like he's clearly figured out how to play the game and seems a lot more comfortable kind of in that role than he did early on, where he was a newbie to Washington, which to your point that we're talking about off there, I guess does suggest maybe he has a taste for the game and he sees himself as a longer-term fixture in GOP politics? Yeah, I have heard that he is interested in being considered for the VP slot on the 2028 ticket. I don't know that he's said anything publicly about it, but that's sort of the rumor that

is of his interest, whether it's of anybody else's interest, I don't know. That's like, what does he bring into the ticket? Yeah, he was asked about this. Well, he was asked about whether he had a desire to stay in politics. Because remember, he had to do one of those step in press briefings for Carolyn Levin when she was on maternity leave. He went and appeared on the podium. And he was asked, he was asked about this.

You know, you're following the footsteps of people on the podium like Rubio and Vance who had done it earlier. The question he was posed was, does your presence here today indicate that we might see you running in 2028? And he responded, no, I think it just means they've run out of things on the food chain. I'm not sure what that means, but I guess he means he's just the latest sacrificial animal. So we'll see. Maybe, maybe not.

Yeah, yeah. Well, if these are his ambitions, he's free to leak them to the bulwark. We'll be glad to write about it. Absolutely. In the meantime, we have more Trump comments on inflation and checks. Let's play his latest in talking about who knows the most about inflation. When you look at $21 trillion coming in and we have $1 trillion very easily affordable, and I know more about inflation.

I know more about everything than anybody in this room, anybody anywhere in the world. Well, there's a woman sitting right over there that she's a housewife, but she's very good. She's got a natural instinct for business. She perhaps knows more than I do, but I actually don't think so. I don't know. Do you think he knows more about inflation than anybody in that room? Sorry, it wasn't just inflation, just to be clear. He knows more about, I think was it, anything and everything than anyone in the room? Is that the right quote? I just want to be sure.

Literally, he knows more about everything than anyone. Come on. Yeah, he's, I know he knows more about grass. He said repeatedly he knows more about grass than everyone in the world, perhaps, and obviously, He knows more about building and his uncle was an MIT professor, so he knows more about everything. You know, like, rocket engineering or something. Rocket engineering and anyone. You know it's about people and hearts. And yeah, what does this guy not know?

He's so, he's so smart. It's amazing. Yeah. The biggest dikees. Why do you feel the need to put down the woman in the front row? Like he was kind of lifting her up and then he's like, actually, no. I don't know. He's all about nagging.

He likes to neg his supporters. He likes to neg the. Ken Paxton. Ken Paxton. And at a recent rally in Ohio, he insulted Houston and Vivek Romooswamy for, I don't know, not being that appealing. He said something like, even if you hate them, even if you hate them, please go out and vote anyway for something related to voter ID stuff, which again, seemed like a little bit of an insult. Presumably he would not have taken so kindly if somebody was like, even if. you hate Donald Trump go vote for something else that the party wants. But yeah, this is,

that's his MO. That's his MO. He's the pickup artist, right? What a guy. Yeah, he's like the pickup artist. What a good pull there. Wow. I forgot all about that guy. Yeah. But he does neg. He does nag. He perfected the art of negging. Yeah. Yeah. All right. Well, thanks, Sam, for chatting through the latest. I'm just sad I'm not, I'm not part of the cheese conversation. Because you know I have a lot of cheese puns in me. You do. Yeah, I actually, I had a footnote in my recent newsletter about how Sam had warned me not to have too many cheese puns, but you know what? And then I added the ball in. Yeah. And then in the end, he added some of the best cheese puns. The headline on that story was Sam's, who cut the cheese, Trump did. Yes, that was all Sam beautifully done. One of my finest pieces of work, yeah. I cannot take credit.

Sam is, he may like dis the fans of punditry out there, but actually he likes it. He secretly likes it. I do. Well, thanks so much, Sam. All right. Of course. We have a very exciting offer for you. The 26 midterm elections are only a few weeks away, and you're about to hear a lot of people

telling you exactly what you want to hear or saying whatever they can to make you the angriest. At the bulwark, we're trying to do something a little bit different. This week only, we are giving our listeners 30% off a bulwark plus membership at the bulwark.com. That's where we publish our newsletters and our written reporting. The people you watch here also write for us. Sam edits me. Sam edits all of our buddies here at the bulwark as well, bringing our insight and humor straight into your inbox with or without additional puns.

Yeah, exactly. Bullwork membership supports independent journalism committed to truth and reason, not scoring points for the red team or the blue team. We are on team democracy. We are not beholden to billionaires or MAGA freaks or any other political contingent. We say what we actually think and we try to have a little fun along the way. By joining, you'll get access to our member community and comments, member only newsletters, written reporting, and frankly, more of us. more of this fine chit-chat, Tete-a-Tete-Tete with Sam Stein and me.

No? No? No. You don't want to promise our audience more. Oh, no, I love it. Sintillating conversation. It's good. Go to the bulwark.com slash surprise to get 30% off bulwark plus for the next year on the bulwark.com and

substack. I am delighted to be joined by Mateo Keeler. He is the CEO and co-founder of Jasper Hill Farm. For those of you unaware, Jasper Hill Farm makes these exquisitely delicious cheeses. You'll find them at Michelin-Star restaurants, at your local cheesemonger, at the cut-to-order cheese counter at, I think, Whole Foods and other big, you know, high-end organic, whatever, grocery chains. Not just that, but Jasper Hill Farm recently took back the Best of Show Prize awarded by the

American Cheese Society for its Winamere cheese, which was described as rich, bark-wrapped, and spoonably soft. So just to get your mouths watering as we start into this conversation, we are here to talk about cheese. Yes, we're also here to talk about the economics of the cheese industry. And most importantly, for the current news audience, probably, is how the current trade wars that our president has launched, have affected the dairy industry, which Donald Trump has in the past said was one of his top priorities for why we were going to trade war with Canada. So for those who are listening to this, you may be aware. This was also the subject of my recent punny, cheesy newsletter, which, thanks to Sam Stein,

my editor was titled, Who Cut the Cheese? Trump did. Lots of other great puns in there. Apologies. Mateo for that, I'm sure you're sick of all the cheese puns these days. But, you know, it's all about the cheddar or lack thereof in the cheddar industry. I would say, given the topic and my sense of humor, it was a fait accompli. Yeah.

Way, way, way, way, way, way, funny. Funny. Well, well, Mateo, okay, great. We've gotten through just a beginning of the cheese punnery. But can we start with you're just telling our audience how you fell into the dairy industry. How did you become a cheese maker? Oh, well, it was basically a process. It was a three-year conversation with my brother, Andy.

And, you know, we were in our in our 20s. And we're both carpenters building homes, second homes in the night pastures of Vermont's failing dairy farms back in the 90s. And we, you know, we had this extended conversation and came to the conclusion that a whole life is really predicated on, you know, like three legs of a stool of, you know, meaningful work in a place that we love with people that we love. And for us, cheese is the meaningful work part. Cheez is the way that we respond to global economic forces that have been stripping and extracting value from rural communities for the last 50 years. And in essence, our business is a response to globalization and an attempt to reverse the flows of capital from rural communities to urban and suburban populations.

We want to basically flip the script. We built a pipeline to places where there's disposable income and where there's plenty of cash. And we put high value products into that pipeline. And we suck cash out of places where there's plenty of it and redistribute it in ways that commodity markets don't. Can you say more about that? Why is it that existing commodity markets outside of your business anyway have not rewarded the rural communities in America or elsewhere? I think this is not just America. I think this is, you know, globally.

If you look at most commodity markets, farmers don't control their price, right? They are price takers. And in the U.S., agricultural policy is incentivized overproduction for the last 50 years, and this has happened under both Republican and Democratic institutions. Food inflation is the third rail of politics. And as we are seeing presently, you know, with escalating, you know, food prices, politicians, you know, do not survive that. And so agricultural policy is really intended to create a surplus, which in essence is a subsidy to processors who have access to, you know, huge, like, volumes of undervalued. commodities and to consumers who have access to artificially low food, you know,

prices in their shopping carts. But that, you know, that value is coming from somewhere. It's coming from the balance sheets of rural businesses, a farmer specifically, who, you know, in the case of a Vermont dairy farmer is paying to milk their cows because the commodity price is below the cost of production, right? And so all those bucolic, beautiful barns that dot the Vermont landscape, well, they're all falling down now and the farms are gone. You know, schools are closing. Young people are fleeing. And that's the same story, whether you're in Kansas or Oklahoma or rural Texas or, you know, rural Vermont. So you ended up in rural Vermont. You started out,

you said building homes as a carpenter, it seems like a pretty big transition to go from carpentry to dairy farming and cheese making. You mentioned that this was part of your desire to pursue a meaningful life. You and your brother and your respective spouses, how did you settle on cheese as the way to find meaning in life? The way to find meaning life is to like build community and to build soil and to create impact in a positive way and you know a place you call home, right? So cheese is just a vehicle. But cheese is an original form of capital.

You know, European banking systems were built on cheese. Cheese is a store of value. it increases in value over time. And that's how we came to understand, you know, the power of outrageously delicious cheese to be transformative at a community scale is real. We built a market, and we are, you know, both lucky and ambitious, opportunistic,

and took advantage of, you know, opportunity. that came our way. We ended up, you know, building a 22,000 square foot series of underground tunnels and this massive monolithic concrete building where we ripen all kinds of different styles of cheese in these subterranean, you know, climate-controlled vaults. We call them vaults because we are. financing agriculture in our community in a different way and leveraging, you know, cheese in order to do so.

I did not know that history of European banking and cheese. I'm going to have to look into that when we. Yeah, there's still a bank in Amelia Romagna where you can take a wheel of Parmigiano Reggiano to the bank, and they will put it in their vault. and front you 80% of the wholesale value of that cheese on the spot. Right. So there's still banks that will take cheese deposits in Europe. Who needs crypto when you've got cheese?

I love it. Okay, so you started. You cannot eat crypto. That's true. That's true. Probably less caloric, but less meat. So you started a few decades ago. You made this hard transition, building from scratch, your own dairy farm, building from scratch, this high-quality cheese mini empire.

And how has your industry changed in that time? Like the rest of the economy, you know, there's been a. huge amount of consolidation, right? There's consolidation at retail. You have Amazon buying whole foods, you know, Kroger Corp buying Murray's cheese, one of our original New York customers. And in the mid-supply chain, you have distributors, you know, swallowing each other whole. And then, you know, our producer friends and colleagues are also being consolidated. We're the last independent. We're the last independent American artisan cheesemaker at scale that's left in the U.S. at this point. And I think that's, you know, true across almost all industries.

Private equity is, you know, consolidating all kinds of businesses, not just in our industry, but, you know, across the entire economy. I mean, that has really narrowed the opportunity for newcomers. You combine that with a lot more regulation, thinking specifically of the Food Safety Modernization Act, which was past during the Obama administration, which created a lot more bureaucracy, not just for us, but for all of our customers, right? where we used to operate this business with one QA team member we now need four. And so the costs and the barriers to entry have gotten, you know, greater and greater. And, you know, tragically, there aren't very many small cheesemakers becoming medium-sized cheesemakers, and there are even fewer medium-sized cheesemakers that are growing, right?

It's a complicated time out there. And I believe that's probably true, not just in dairy, but, you know, in the food industry as a at large. So despite the economic headwinds you just described, you have been able to open up some export markets or you had been able to open up some export markets. Tell me a little bit about that process. What share of your business is export today? 0% of our business is export. Now, there's a couple of different reasons for that. They all start and end with, you know, Trump administration policy in one way or another.

But, you know, we were selling American cheese to the French market just year before last, right? And exporting cheese to Europe, Australia. and we spent 10 years building an opportunity in Canada. You know, we're two hours from Montreal, which is, I would say, the best cheese market in North America. Quebecers understand cheese. There's a cheese culture right across the border, and they have a supply management system for their dairy industry.

So, you know, in order to export cheese into that market, you need quota. We had, well, we have a great relationship with an importer in Ontario who allocated quota to our brand and was bringing our cheese in. And we're growing very quickly. So, sorry to interrupt. Let me just pause for a second just so our audience understands. What this basically means is that there's a set amount of cheese that can be sold into Canada, right? and that that's the quota.

And then anything above the quota basically has historically had a prohibitively high tariff rate. So you want to be part of the quota allocation, which your company was. Okay, sorry. Exactly. Yeah, exactly. And so once we had an importer and once they had dedicated quota to Jasper Hill, we were able to start building a market and selling cheese into the Canadian market. market, and that was going ganglusters. I mean, it was by far the fastest growing part of our business. February of last year, Trump tariffs were announced, but it was also this rhetoric around

Prime Minister Trudeau being a governor and Canada being the 51st state that I think really was offensive, you know, at its core to the... Canadian, our Canadian neighbors. And, you know, while our cheeses weren't being tariffed, our sales basically dropped off a cliff. You know, our February 2020-5 pre-order had zero cases of cheese on it, right? I mean, it really went from, you know, riproar through the holidays, January was amazing. And February was like hard stuff. And, you know, we understand. We understand.

And we empathize with our Canadian neighbors. I believe that we all need to make some sacrifices. And Canadians are voting with their wallets. They are digging their heels in and resisting the creep of fascism and the threat that, you know, that kind of rhetoric really plays, both to their economy and their culture and their identity as Canadian. their identity as Canadians. So, you know, I believe I would probably be doing exactly the same thing.

So you empathize with Canadians boycotting American goods, even when those American goods are made by you. Yeah. I mean, it hurts, right? This hurts. But we have friends on the other side of the border who are making cheese, living the same lifestyle, you know, milking cows. And, you know, they were exporting cheese into the U.S.

market and they lost their market too, right? There's no, there are no winners here. Everybody in our region is losing. There are no winners. So I have no, like qualms about, you know, calling a spade a spade. Everybody around us is suffering, whether it's, you know, inflated higher cost of goods and groceries or, you know, the absence of, Canadian and Quebec tourists.

The, just a real significant downturn, whether you're in the ski industry, mountain biking, you know, we have a brewery right, right next door. Everybody is hurting.

And the same is true on the other side of the border. You know, we, this part of Vermont, it's not uncommon to have family members on both sides of the border, you know,

and people go to school on both sides, you know, of the border. do their shopping both sides of the border. And 60% of Vermont's exports, international exports, are to Quebec, right? And it's all right there. This is very painful, but it's not just painful for us. You know, it's painful for businesses and for families on the other side of the border, too.

I can't tell who's winning. I mean, there's like, there's no winning. There's no winners here. So, Matteo, one of the reasons I was so. interested in talking with you and learning more about the dairy industry and how it was affected by these trade wars is that I had been under the impression that the U.S. dairy industry was supposed to be the one winner from our trade war with Canada. Trump talks all the time about how he is furious about how poorly Canada has treated American dairy, that they have these, you know,

multi-100 percent tariffs on U.S. dairy, and that that was like the only only, you know, the only specific concrete thing he's often able to cite for why he's mad at Canada. It's because of our dairy farmers. Is there any truth to that? Is there some beef going back about how the Canadian government has treated U.S. dairy? The answer is yes, right? They have a supply management system, but they also have it for pork and chicken and maple syrup and a lot of other commodities. You know, it's striking to cross the border. In Vermont, you have this generational poverty that's been playing out on dairy farms across the landscape. You cross the border and farms are prosperous. There's new trucks and tractors. Things are tidy houses or painted. Barns are well kept and

maintained. You can tell that farmers, dairy farmers are building equity. The cost of that, you know, is a higher priced dairy products in that market. Meanwhile, in Vermont, when we started milking cows here, there were 1,200 dairy farms. And we've lost 50% of our dairy farms in the last 10 years. We're producing the same amount of milk, right? So, you know, the way we see a dairy farm, it's a huge cash cycler within a It supports all kinds of ancillary and tangential businesses that cycle capital at a community scale. When you lose a farm, you're losing, you know, this cash cycler.

We have 401 farms, the last, you know, kind of census. I got a report from the Agency of Agriculture on a monthly basis, and we're down. We're just about under 400 farms left. These farms are much, much bigger, right? Their environmental footprint is also much, much bigger, right? We're getting to a place now where if you're not milking 1,000 cows and planting 600 acres of, you know, corn, you're not viable. And as I was talking about, you know, the role of commodity markets in supply. supporting these undervalued and subsidized commodities for consumers.

This is what it means, right? It means essentially a Holocaust on a landscape scale is taking place. And farms that have been in production for generations are disappearing. And what's disappearing with them is, you know, kids. There are no kids in our school because there are no farms, right? And if you're in farm country and there are no farm kids, you don't have a school. And if you don't have a school, you lose a beating heart of your community. You cross the border into Canada, and it is completely different.

It's a different feeling. You know, it's palpable. And I believe, honestly, the Canadian dairy farmers are way better off with their supply management system. And honestly, we should probably be looking. in that direction too. Well, I can, given what you've described as the trajectory of this industry in Vermont and elsewhere, I can kind of understand why rural voters may have seen some appeal in the promises that Donald Trump gave them, that he was going to burn it all down, basically, and he was

going to reclaim all of this money that was, going to the wealthy for the common man, you know, to the swamp for the common man. It doesn't quite seem like it's worked out that way. I'm curious, what is your perception of how people in rural Vermont or other rural areas, even to the extent that you're talking with people in your industry in other states, how they feel about the trade wars and the policy choice. that this administration has made. Do they, are they angry?

Do they think it's, you know, it's heading in the right direction? There's big dairy, right? And then there's like the rest of us. And I think it's important to, you know, disentangle that. There are, you know, massive, we're a rounding error, okay? Within the dairy industry, we are essentially insignificant, except we've built a very powerful brand. If you're a farmer and you're selling commodities, you have no identity.

You have no power to affect your experience. And our neighbors, you know, a lot of whom voted for Trump, you know, we are in Bernie country, just to be transparent. You know, and Bernie carried the Northeast Kingdom for, you know, a general. generation. And Vermont farmers would have voted for Bernie because he was talking about making some of the same kinds of changes, right? The thing about Trump policy is it's not really rooted in a coherent philosophy. I think it's become clear to anybody who is paying attention that it's just,

just a massive kleptocracy at this point. So the amount of self-interested economic decision-making that's going on generally has nothing to do with like, you know, dairy farmers. If it had, the tariffs would have been much higher. And they would have been paired with, you know, agronomic and industrial policy to rebuild industry and agriculture on this side of the border. But they weren't, right? The Trump administration has put in place pretty formidable tariffs on Canadian dairy. I think there are 50% tariffs on Canadian cheese coming into this country at this point. Some Canadian dairy products are now outright banned from import, various kinds of way protein products.

Has that been helpful to you? No. I mean, mostly because, you know, I don't think there was a lot of Canadian cheese coming into the market to begin with. And unless it's paired with a level of investment in capacity, there isn't anything anybody can really do. You know, if you look around the dairy industry in Vermont at a processor level, there, you know, we've just, we've had four. processors leave the state, right, in the past two years. Our processing capacity is just being gutted. And it has to do with, like, a lack of access to investments at municipal scales for, like,

industrial wastewater to support, like, dairy processors. And it's not the marketing that's, and the market access piece that's missing here. It's infrastructure, right? And a lot of that infrastructure money that the Biden administration passed was like canceled. And, you know, if you're in a blue state, you're particularly, you're being punished for your geography. So, you know, I think the thing about tariffs is they might take a generation to have. have an impact and they won't really have an impact unless they're part of a coherent industrial policy and investment.

You know, markets are historical and political constructions, right? There's a lot of things that are changing here right now. And ultimately, you know, the market that we end up with on the other side of this is going to be dependent and a product of, you know, the politics at the moment. I think what I'm saying is that it's probably too early to tell whether that's going to make much of a difference. And I don't think it's going to make much of a difference unless it's like coupled with industrial policy that uncorks the productive capacity of processors to take advantage of the opportunity. But, you know, interest rates are very high. And the federal government hasn't really been, you know, dishing out dollars to, you know, states to build, like, infrastructure in the way that you would need to, in order to, like, really harness the opportunity.

Well, in addition to the tariffs on Canadian cheese, as I understand that there are also pretty high tariffs on European cheese, which I imagine we do import quite a bit more of and that you may face more competition from. The usual argument in favor of tariffs is something like, well, if you make the foreign version more expensive by taxing it, that will divert more customers to the domestic product because, by comparison, it's more attractive because it's cheaper. Have you at least benefited in the near run from that, from tariffs on European, you know, Italian or French cheeses? No. In fact, I think the tariffs have hurt us because from what I understand and things may have changed, but I don't think they, I don't think they have recently is that those tariffs are like 10 to 15%.

And that is just enough for importers, distributors, and retailers to blend out the impact of by taking higher margins on domestically produced cheeses. Right. So one of the things that we've been experiencing is, and seeing at retail and through distribution is that distributors and retailers are taking a higher margin on domestically produced cheeses like ours in order to lessen the pain for consumers of the tariffs on Swiss, French, and Italian, Spanish cheeses that are coming into the market, right? That slows down our movement and volume because our cheeses are carrying more of that burden, which is kind of the perverse effect and unintended consequence of that policy, if they were 50% tariffs, that might not be possible, right? And the 50% tariffs are absolutely like stopped

cheeses from Quebec coming into the market. But I'd just take a step back one step further and say that like our customers are really suffering. And when I say our customers, I'm talking about the distributors and retailers that we're working with. This is hurting them because the domestic capacity to produce, I don't know, Rokefort or Grier or Pomajano Reggiano, you know, these iconic, you know, PDO, you know, protected designation of origin cheeses doesn't exist and never will here, right? And so the market. You can't make Parmesan cheese. And you can't make a cheese that and it's a first sale.

And call it. Right. Right. You can't call it that. You can't call it that. Right. And consumers want those cheeses. I would love it if we had a vibrant, you know, artisan, you know, cheese industry that was at scale that could fill the void for American consumers. But when our customers are suffering, that's not good for us either. Right. So I think there's a couple of different things going on with tariffs in different markets. And on the one hand, you're really putting tariffs on a dairy industry that's already constrained by supply management.

It's not like they're making tons of extra cheese up there. And they're certainly not exporting, you know, tons of it down into the U.S. market. And on the European side, the tariffs, if you really want to make a change in, like, domestic production, are set at a level where they are more like an irritant and something that just increases the uncertainty and the bureaucracy and the cost of, you know, doing business and those costs are all being passed on to consumers and everybody's seeing that and there are higher grocery bills. And I imagine that, well, if it is the case that at the retail counter, they're spreading the cost of these tariffs across all the cheeses, not just the ones that are being directly tariffed because they're foreign produced cheeses, that's going to that's going to raise the cost of everything for consumers

that might make it more difficult for consumers to buy as much cheese. That's probably going to reduce demand for your cheese as well in addition to the Parmesan or the Swiss cheese or what have you. Talk to me also about how the tariffs have affected the things that you buy because it's not only cheese, right? We're talking about dairy and isolation that's been tariff, but it's lots of other things too. It is lots of other things.

And, you know, one of the issues that we're dealing with now is a price increase on the uncorrigated boxes. Our boxes are manufactured here in Vermont, but they're the paste, the pulp, you know, the processed, like pulp is produced in Canada and is being tariffed as it crosses the border. Right. So our cost of packaging is going way up. We're expecting something like a 30% increase over what we were paying, you know, pre-tariffs. The cost of equipment manufactured in Quebec, you know, looking behind us, there's a lot of stainless steel, a lot of our cheese making equipment and our molds are produced in Quebec. They're either going to come across without tariffs, depending on what the product actually is, where it could be 50% tariffs on steel and aluminum, you know, are going to get whacked.

And we've already experienced that we have on, we're upgrading our other cheese plant in the middle of a big equipment upgrade. and about half of our equipment came from Quebec. It was ordered pre-tariffs, and we got slammed. After the fact, with additional costs, makes it really hard to budget or keep up with the escalating costs of just construction materials, like generally. It's been kind of a nightmare. And diesel, I imagine as well.

I think you mentioned that earlier. It's not a tariff issue. That's a different policy. Yeah. Yeah, well, we lost our Australian market when we found out that our cheese was being cross-stocked in Dubai. And so aside from the logistics disruption around transportation in the Middle East, the cost of the cost of. fuel and fertilizer has just gone through the roof. Now, pre-Ukraine war, you could buy fertilizer urea for about $250 to $200 a ton, and this past summer was over $1,000 a ton, right? And, you know, we don't use chemical fertilizer that way, but it's affecting farmers.

across the whole country, right? That and, you know, $7 like diesel is going to drive cost of production up. And if you don't have the margins in whatever commodity you're participating in to absorb those costs, you're going out of business. Right. So this is going to be existential for the agricultural community at large and for our food system. I think we're at the beginning of an inflationary period that at this point doesn't really have an end in sight. And, you know, I think voters, and I know I can speak for like rural Vermonters specifically are, they've had it, right? our neighbors who, you know, voted for Trump, have nothing but regret.

And, you know, Vermont is going to go blue. It'll be the first state to be called. And, you know. Yeah, I'm not sure Donald Trump is so worried about losing Vermont voters. He's not too worried about losing, you know, the vote up here. But I think, you know, the consequence. are coming and I hope that they will be decisive and swift here. You know, I think we're in it for a while.

Yeah, I mean, it does sound like I'm listening to all the things that you're rattling off. So we, Donald Trump, through his policies, has ticked off your customers abroad such that they're no longer buying your goods, even if they are not being tariffed, which in places like Canada, they are. He has made your inputs like diesel and equipment more expensive. The tariffs have sufficiently destabilized your downstream customers so that it sounds like their costs and ability to make purchase orders from you might be somewhat affected. And then the things that they are selling, the products of yours that they are selling are getting more expensive because they're passing along some of the tariffs to those items.

And then you have assorted other policies like saber-rattling against the Canadians, which presumably is not going to endure your products, rather. And honestly, like the bond market, which is affecting everybody. Interest rates. We're a debt finance business. I think we're in it for the long haul. We've got a $40 trillion deficit. And, you know, there is no longer any concern about that on the Republican side at this point.

You know, it is absolutely insane. We're spending more on interest than on defense at this point. And so, you know, this is a, there's a cumulative. It's an accumulation of, like, pressures. And, Catherine, I'll tell you, we're going to be okay. We're not about to, like, you know, falter and go out of business or anything like that. We are adapting and we're going to, you know, figure out how to center our people and do the right thing by the farmers that we work with and enroll with it. but I think we're in for some, you know, stormy weather for a while and we're, you know, battening down the hatches because none of this is actually sustainable, like, at a societal level.

Well, I'm glad to hear that Jasper Hill Farm will be okay because the world needs your cheese. I am saddened to hear about the struggles that the industry is currently enduring, particularly when so much help had been promised. For those who are interested in these products, you can find them at jasperhillfarm.com or at your local cut-to-order cheese counter. Mateo, thanks so much for joining me today. Thank you. And let's not forget, cheese actually has been with us from time immemorial.

It's primordial. And, you know, it will be with us, you know, until we cease being human. I think, you know, I have a lot of optimism about the future of cheese. So thank you all. And thanks for supporting our work. And thanks, Catherine, for telling our story. Thanks for watching and listening to receipts. Make sure to follow the feed and subscribe wherever you get your podcast.

Bye for now.