At 4:00 p.m. on Friday, August 15, the Trump administration quietly announced that imports of more than 400 additional products—valued at almost $210 billion in 2024—would be subject to “national security” tariffs on steel and aluminum. The action is disturbing for many reasons.
For starters, many of the listed items can’t plausibly be considered “steel products,” or “aluminum products,” or otherwise related to actual national security. As bad if not worse, the administration gave US importers of these goods less than 24 business hours’ notice before their products’ steel and aluminum content would be taxed at a 50 percent rate, with no leeway for products already en route to the United States or for US companies that don’t have said content (and why would they?). And the administration used a “tariff inclusion” process it instituted last February to invite any US company to request import protection under the guise of “national security,” thus encouraging a flood of such requests (and a lobbying bonanza) in response.
All in all, it’s yet another example of how US trade policy has gone off the rails during the second Trump term.
President Donald Trump’s announcement on Friday that the U.S. government will take a 10 percent stake in long-struggling Intel marks a dangerous turn in American industrial policy. Decades of market-oriented principles have been abandoned in favor of unprecedented government ownership of private enterprise.
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The most immediate risk is that Intel’s decisions will increasingly be driven by political rather than commercial considerations. With the U.S. government as its largest shareholder, Intel will face constant pressure to align corporate decisions with the goals of whatever political party is in power. Will Intel locate or continue facilities — such as its long-delayed “megafab” in Ohio — based on economic efficiency or government priorities? Will it hire and fire based on merit or political connections? Will research and development priorities reflect market demands or bureaucratic preferences? Will standard corporate finance decisions that are routinely (and mistakenly) pilloried in Washington, such as dividends or stock buybacks, suddenly become taboo?
These risks are already evident, and not just in historically underperforming government-owned enterprises such as Amtrak or the U.S. Postal Service. Intel chief executive Lip-Bu Tan agreed to the deal only after Trump demanded he resign over benign investments in China. Trump’s description of their Aug. 11 meeting says it all: “He walked in wanting to keep his job, and he ended up giving us $10 billion for the United States.”
Molly Ball reports that Trump’s partial socialization of Intel is being, not silently, but explicitly praised by at least one famous socialist: Bernie Sanders. A slice from Ball’s column:
The announcement last week that the government plans to take a 10% stake in the troubled U.S. chip maker Intel prompted an outpouring of criticism from voices on the right, who accuse the administration of nationalizing industry. “Today it’s Intel, tomorrow it could be any industry,” Sen. Rand Paul (R., Ky.) said Friday. “Socialism is literally government control of the means of production.”
That was music to the ears of Paul’s self-described socialist colleague, Sen. Bernie Sanders (I., Vt.), who praised the move that he said mirrored legislation he had proposed. “Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return,” Sanders said Friday, urging the administration to go still further.
Under the deal announced Friday, the U.S. government will become Intel’s largest shareholder as nearly $9 billion in grants awarded to the company by the 2022 Chips Act are converted to equity. Commerce Secretary Howard Lutnick said Friday the agreement would “both grow our economy and help secure America’s technological edge.”
The farm equipment maker is an American manufacturer that Republicans say tariffs will help. Maybe not. The Moline, Ill., company is laying off 238 workers at three factories in Moline, East Moline, and Waterloo, Iowa, in the coming weeks.
This month the company reported a 26% drop in net income and 9% decline in sales, owing to lower commodity prices and higher tariffs. “Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year to date,” said director of investor relations Josh Beal.
Deere expects the pretax damage from tariffs to reach $600 million in the current fiscal year, up from a previous forecast of $500 million. The hits are coming from President Trump’s tariffs on India, the European Union and his 50% border tax on steel and aluminum. The costs hit Deere’s earnings and ultimately employment. What was that again about the New GOP and the working class?
This tariff damage isn’t surprising since many U.S. manufacturers rely to some extent on imports of components and raw materials. Caterpillar Inc., another great U.S. manufacturer, has said tariff-related costs could reach $1.5 billion in 2025, including as much as $500 million in the third quarter. Tariffs raise costs, and their uncertain implementation has customers of the equipment makers more cautious in their investments.
Apparently, no one at American Compass realized that the claims made in these two chapters were contradictory: one claiming the profit seeking has driven capital out of America, and the other claiming that America is oversaturated with capital from abroad. Whether capital is fleeing or flooding the country, the American Compass solution is barriers to trade.
America still has a robust manufacturing sector, has an incredible standard of living, and is a global hub for innovation. Americans are by and large thriving and living the American dream. That does not stop Cass and Lighthizer from peddling protectionism, even if the claims they make are contradictory.
Ken Girardin warns of the GOP’s new alliance with the Teamsters.
Writing at National Review, Phil Magness reviews George Selgin’s remarkable new book about the New Deal, False Dawn. Two slices:
George Selgin’s False Dawn: The New Deal and the Promise of Recovery, 1933–1947 attempts to make sense of these competing narratives by placing the New Deal under a microscope and asking whether it met its stated goal of economic recovery. Note that this objective was only one part of Roosevelt’s call for “relief, recovery, and reform,” although, as Selgin explains, it is the central question of the New Deal’s economic legacy. The other two objectives involve political values, whereas recovery can be measured empirically.
In taking up this charge, Selgin dives into a crowded academic literature that is largely pro-Roosevelt. In 2019, Senator Chuck Grassley (R., Iowa) sparked a firestorm in the history profession with a passing observation that the “New Deal in the 1930s didn’t work.” Several historians responded with indignation, proclaiming that there was a broad consensus over the alleged successes of Roosevelt’s recovery program. Few were more vocal in this assessment than Roosevelt biographer Eric Rauchway, a professor of history at the University of California, Davis. In a follow-up essay, Rauchway denounced claims about the New Deal’s failure as “myth,” “falsehood,” and an exercise in “bullsh**” uttered without regard for evidence or substance. Pointing to simple industrial-output data from the 1930s, Rauchway declared that “not only did the U.S. economy begin to grow during the New Deal; it grew rapidly.” Post hoc ergo propter hoc ensues, thus the New Deal simply must have been the cause of the recovery. Indeed, the only major fault Rauchway can bring himself to state about the New Deal is that it “should have been bigger, sooner,” thereby embracing the advice of John Maynard Keynes even more fully than Roosevelt is presumed to have done.
Selgin illustrates the folly of this narrative early on, though not by attacking it directly. Assessments by historians tend to speak of the New Deal as a cohesive whole — a sweeping economic vision, deftly enacted and with clear results. Selgin inverts this narrative by separating the New Deal into its component programs and asking how each, specifically, performed its stated objective of economic recovery in its respective domain.
Scalpel in hand, Selgin takes his reader through a chronological progression of programs and policies that we collectively know as the New Deal. An economic historian of money, he opens his inquiry with the banking crisis at the outset of Roosevelt’s term in 1933 — a suitable starting point, given that our best theories of the Depression’s origins pinpoint monetary mismanagement as the underlying mechanism. His study progresses through the Banking Act of 1933, the creation of federal deposit insurance, and Roosevelt’s decision to withdraw gold from private circulation. The New Deal’s famous “three letter” programs — the National Recovery Administration (NRA), the Agricultural Adjustment Act (AAA), and the Reconstruction Finance Corporation (RFC, which Roosevelt inherited from Herbert Hoover and greatly expanded) — are surveyed in depth next.
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In keeping with the book’s even tone, Selgin is charitable to the historians he engages. It is difficult to avoid the conclusion, though, that he has upended many long-standing conventions, and decisively so. Rauchway’s attempts to vindicate the New Deal’s economic performance come across as the amateur musings of a pundit when compared with the methodical analysis of False Dawn. In similar fashion, Rauchway’s portrayal of Roosevelt as a consistent economic theoretician, often operating in dialogue with Keynes, emerges as a battered wreck. The difference in both cases comes from Selgin’s stronger command of the underlying economic theory and greater attention to historical detail, even when they lead him to conclusions in tension with his own distinctively non-Keynesian outlook.
