Which American politician said the following?
Item one: “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should . . . EAT THE TARIFFS, and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
Item two: “After causing catastrophic inflation, Comrade Kamala announced that she wants to institute socialist price controls . . . Her plan is very dangerous because it may sound good politically . . . This is Communist; this is Marxist; this is fascist.”
If you guessed that both are statements by Donald Trump, you have broken the code on the bizarro world of the President’s second-term economic policies. Last year he blasted Kamala Harris’s proposal for price controls on groceries. But now he is attacking Walmart for warning that it will have to raises prices in the wake of Mr. Trump’s tariffs.
Mr. Trump’s flip-flop on price controls is a rebuttal of his own previous tariff claims. For months he’s said that foreign producers pay the full cost of tariffs. But now he’s admitting that Walmart, an American retailer, will have to eat some of the costs or pass them on to Americans.
Walmart, which reported a net profit margin of a shocking (#irony) 2.5 percent in 2024, and prides itself on its price competitiveness, is unlikely to pass on the tariff increases unless it “has” to. In the end, however, Walmart has to run its business in the interest of its shareholders, the people who, you know, own the company. One of the (many) objections to ESG and stakeholder capitalism was the way that those two ideas represented a partial expropriation of shareholders’ rights. The same is true of political bullying intended to persuade a company to adopt a suboptimal pricing strategy. It’s also an attempt by the administration to persuade private companies to (effectively) subsidize its policies — on top, that is, of the taxes they already pay.
The president’s comments borrow from the Biden-Warren playbook. Standing behind them are implicit threats of investigations by one federal agency or another, just as there were during the worst of Bidenflation. If Walmart is intimidated by Trump’s threats, that will set a bad precedent. It will also discourage investment in the U.S. The administration argues that businesses will invest more in the U.S. to avoid tariffs. And some are and will continue to do so. Others might decide that investing in a country where the executive becomes so involved in corporate decision-making might call for a little caution.
And if Walmart crumbles and accedes to the president’s wishes, its profits will be less that they might otherwise have been. That means less money to invest, less money to hire, less money to pay its investors.
Since Inauguration Day, the Trump administration has announced new or revised tariff policies more than 50 times, according to a tally by The Washington Post. More than a dozen tariff-related executive orders have been issued, averaging about one per week. It’s a lot for anyone to keep up with, let alone small business owners who are tasked with running day-to-day business operations.
Dominic Pino talks with David Hebert about Trump’s destructive trade ‘policy.’
On the one hand, President Donald Trump argued that he would be a fool not to accept from a foreign autocrat the gift of a $400-million airplane…. On the other hand, Trump denies the American residents’ freedom to import goods produced in China, one reason being that their production is deemed subsidized by the Chinese state. He unilaterally levied very high and often prohibitive tariffs on these goods (he later backed off, but high tariffs remain).
Here’s the abstract of a new paper by Fiona Paine, Richard Townsend, and Ting Xu:
This paper examines the evolving policy landscape surrounding foreign investment restrictions in innovative startups. Drawing on recent research, we analyze both the security benefits and economic costs of policies like the Foreign Investment Risk Review Modernization Act (FIRRMA). The evidence suggests that foreign investments do facilitate measurable cross-border knowledge spillovers that may raise legitimate security concerns. However, restricting these investments imposes significant costs on domestic innovation ecosystems, including reduced capital availability, disrupted investor networks, and potentially diminished innovation outcomes. These effects extend well beyond directly targeted foreign investors to affect domestic venture firms and startups. We explore design considerations for more effective investment screening policies, including industry targeting, investor heterogeneity, and implementation approaches, as well as complementary policies that might address security concerns while minimizing costs to innovation. We conclude by outlining promising directions for future research on this increasingly important intersection of innovation policy and national security.
