In the US steel industry, tariffs successfully replaced imports with domestic production. However, this shift did not increase the total supply of steel available in the economy. Instead, it caused US steel prices to significantly diverge from and exceed global prices, creating higher costs for domestic buyers.

The proposal to levy tariffs and then issue rebate checks is economically nonsensical. It creates massive bureaucratic leakage, making it more efficient to simply not have the tariffs. Furthermore, the policy uncertainty paralyzes businesses, creating non-economic costs that are more damaging than the direct financial impact of the tariffs.

Aggressive tariffs, later deemed illegal, caused trillions in market loss and passed costs to consumers. Although the government must return the collected funds, the damage to supply chains and household finances is permanent. This highlights how action-oriented policies, even when nullified, can have lasting negative consequences.

Trump's praise for Intel transforms the complex CHIPS Act investment into a simple, successful financial transaction for voters ('made...tens of billions...in just four months'). This narrative bypasses nuanced policy debate, making strategic industrial policy immediately understandable and popular with the public.

While likely not deliberate, the Trump administration's chaotic policies function as a new economic experiment. By artificially restricting production and controlling demand through tariffs and favoritism, it creates a hybrid of capitalism and fascism. This serves as a real-world test for a non-growth economic model, however horrific its implications.

Businesses can adapt to stable, even unfavorable, policies. However, constant, unpredictable policy changes create an environment of ambient chaos where long-term capital investment is impossible. The lack of continuity, not the specific tariffs, is the primary reason industrial construction spending has turned negative.

The "invisible hand" of the market has led to the hollowing out of America's industrial base. The US should learn from China's focus on production and scale, adapting tools like public investment to crowd in private capital for frontier industries, rather than fully copying China's state-directed model.

There's a profound disconnect in the U.S. between the perceived need for more manufacturing and the actual desire to work in that sector. While 80% of Americans believe the country needs more manufacturing, only 20% would want a manufacturing job themselves, highlighting a cultural preference for white-collar or service-based work.

US policy fetishizes a return to manufacturing, which employs 11% of the workforce. However, protectionist policies like tariffs actively harm the higher-margin, larger tourism industry, which employs 12%. This represents a sclerotic and irrational trade-off that damages a more valuable sector of the economy.