Of course, he doesn’t see it that way, but that is the reality nonetheless. Mr. Trump once again came out yesterday against Nippon Steel’s purchase of U.S. Steel. We’ve discussed this a couple of times, here and here, so the basics of the deal haven’t changed–Nippon Steel will invest significant capital ($1.4B) into the new subsidiary to make the company internationally competitive, and will pay the current shareholders significantly more than the politically connected Cleveland Cliffs. We’ve talked about how this is pure theft, since private shareholders are legally allowed to sell their company to someone else if they want, and the only justification for political intervention is national security, which makes zero sense since Japan is a close ally and the firm stays in the U.S. and will actually increase U.S. production of steel! For Mr. Trump to come out yesterday is really part of his broader attempt not simply to kill Reagan Republicanism, but to remake the party into the populist image of the Democratic party of the 1990s, with his ongoing romance of unions. You see this in his very poor choice for Secretary of Labor, Republican Democratic representative Lori Chavez-DeRemer, who supports far-left labor bills such as ending right-to-work laws and secret ballots for unionization (which precludes workers from physical violence by union supporters).

So why another blog post on this? I find the irony of Mr. Trump’s reiteration of his strong support for industrial policy noteworthy this week. Intel Corp’s CEO, Pat Gelsinger, was just fired by the board for Intel’s stunning collapse in the chips market despite being given billions of taxpayer dollars in subsidies for new chip fabrication facilities, including right here in Ohio. Further, Stellantis CEO Carlos Tavares abruptly stepped down after years of poor performance in trying to implement the industrial policy of EVs. If government subsidies were the solution, these companies should be flourishing, but inevitably they fail. Shockingly to the proponents of industrial policy (like Joe Biden, Bernie Sanders and Donald Trump), the way to make companies more competitive is actually to make them compete! We all know this in life. Imagine a politician that grew up in deep blue California and never had a tough general election. Do you think she’ll end up being a good candidate when she runs for president in 2019? Or again in 2024 when she had no primary to hone her skills? Or consider your favorite football team. Imagine that instead of hard workouts, you had subsidies to pay off the refs all season to get to the superbowl. How competitive do you think they’re going to be in the big game? Show me the sustained excellence of companies that are beholden to government handouts. For any one you can find (if that) I can show you dozens that do not perform as well. Where are the firms that are the most innovative? Precisely in the areas where there is the least government involvement.

One of the tenets of conservatism is to point out that good intentions aren’t enough, it is the results that actually matter. And the record of tariffs favoring domestic industries and industrial policy more generally is one of failure after failure. Go back and look at Mr. Obama’s first green energy flops, like Solyndra. Or take a current look at the EV industry. Or just to look at Mr. Trump’s prior steel tariffs–they didn’t lead to a stronger steel industry.* Conservatives know better because conservatives think better.** And Donald Trump is no conservative.

* To be fair, President Biden relaxed some of the steel tariffs with Europe, but only to be replaced with quotas which are even worse!

** Bonus rant that is tangentially related. Laura Ingraham was promoting protectionist policies last night in her opening session (which I had the misfortune to hear). Go to about the 5 minute mark, where she lauds Europe for protecting its markets with tariffs and suggests that we should be doing the same. This is where we want to do just a wee bit of thinking. Europe has indeed done as she describes. But how healthy is Europe’s economy? They have grown more slowly, with far less job creation than the U.S. for decades. Laura, are you really sure we want to emulate Europe?