"Strategic-sector investments were not the main focus of the “Liberation Day” tariff announcements of April 2, 2025."
They most certainly were the main focus. Jesus, just listen to all the interviews done by Scott Bessent, Howard Ludnick and JD Vance. Their messaging has been complete clear as to the basis of the Trump economic plan. Trump himself has been saying the same things for 30 years. He has been opposed to the US-funded global order. The US has been getting ripped off for decades. The American working class has been hammered by the loss of economic opportunity. Industrial capability has fled to countries with cheap peasant labor for corporate profit maximization and corporate primacy. It has hollowed out thousands of communities.
Tariffs from the Trump administration have been fully explained as targeting a correction of these problems.
"A year later, however, efforts to support such investments—both through trade agreements and expanded domestic financing capabilities—may be the most promising developments to result from that chaotic episode."
The key to industrial revitalization (especially of exports) and growth is to reduce the federal deficit to no more than the sum of productive public investment. That means, mainly, revenue increases undoing the damage of the GWB, Trump1 and Trump 2 tax cuts. Rolling triffs back to Obama levels will also help.
Strategic‑sector investment wasn’t the point of the April 2, 2025 “Liberation Day” tariffs. Those announcements were major, sweeping tariff hikes. Markets tanked, the harshest measures were paused within a week, and the Supreme Court later ruled that IEEPA doesn’t allow a president to impose tariffs, wiping out much of the package. The broad tariffs also raised costs on imported machinery that U.S. manufacturers still depend on.
The durable outcomes came later, trade negotiators secured new Japan and South Korea agreements that tie lower tariffs to investment commitments in U.S. strategic industries, a structural problem that has driven offshoring for decades.
Context from the prior administration, Between 2021–2024, three major laws, the CHIPS Act, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act, triggered a surge in semiconductor, battery, EV‑supply‑chain, and clean‑energy manufacturing projects. Companies repeatedly cited those laws as the reason for new U.S. facilities, and federal financing tools expanded to support them.
Taken together, the investment‑focused Japan and Korea deals build on an industrial‑policy shift already underway, even though they emerged from the chaos of the 2025 tariff episode.
We have been financializing for the last 50 years drastically and ignoring making stuff we really need for security. All in the name of efficiency and arrogance. Globalization was the mantra of the day and is hopefully finally played out. This globalization was very beneficial to bankers - London (London is not really England both are separate entity's), BIS, reserve banks, TBTF banks, certain politicians, military industrial complex (Pentagon included here big time) and certain well-connected stock/ bond traders.
It will take years to turn this around IF we can. As a businessman in the USA, I would not build crap here. Too risky and too much bad politics here to invest heavily in. I would outsource too.
Especially if the democrat liberals come back into power after the 2028 elections. This would be a game changer and back to banks running the show bigger further corrupt politics, and way more QE to grand scale with no real invest using this liquidity to jack up the economy. All will be dead in the water.
We hopefully are not too far gone. Time will tell.
Oh, Good. More Liberation Day fantasy self pleasuring. Project 2025 is a nearly seditious Heritage Foundation effort. With Trump as the MC it is closer to treason than any spy could ever have managed. Unless, of course, Russ Vought is that Russian spy. In that case, well done, Russ. Now go to prison.
There are quite a number of things about this "project" that are alarming. Mr Krein treads diplomatically around them, refusing to call a spade a spade. First, I should say I totally agree that America is in a dangerous position due to financialization and de-industrialization of the economy over the last half century. Those two trends have been to the serious detriment of US workers and the middle class, not to mention our basic national security. I largely agree with Oren's assessments and many of his prescriptions. The problem is that just because Trump loves the word Tariff, does not mean he understands nor is committed to using it correctly in the larger project of Re-industrialization and De-financialization. Or in any project other than inadvertently creating chaos.
Tariffs are a subtle and very indirect tool to influence industrial investment. I am convinced there is a strategic place for them in the context of a much larger national investment effort. It is that context that is missing. Biden got the ball rolling with the Inflation Reduction Act and the Bipartisan Infrastructure bill. That was proper context. Trump should have Tripled down on that. Trump is instead extracting hand-waving "deals" of foreign investment which, as Mr Krein notes, are being slow walked to wait out this administration. Because Trump's approach is fundamentally NOT how you go about it and everybody understands that except Trump.
We need legislation that promotes the things we want to happen. Investment in the US should be something foreign companies are begging to get in on, rather than being crassly strong armed to pay up. But What is the deal with foreign investment as a metric of how we're rebuilding Our industrial base? We don't need any of it with proper incentives.
Giant shifts of incentive are needed. They will be painful to lobbyists, the politicians they own, and financial sector leeches on productivity. Non productive investment instruments should be banned. Government backed investment in industrial enterprise could then be very compelling. Along with that level of ground shaking change, tariffs could then be useful along with actual import and export bans. To make this happen in any reasonable time frame will require substantial government management of the economy. That's just reality. We've done it successfully before. We should do it as soon as Trump is gone.
I see some in this administration playing around the edges, giving occasional lip service to the idea of helping the working class and rebuilding our industrial strength. But overall, really, nothing but hot air. No legislative initiatives, no clear uniting policy goals, Nothing that matters. Liberation Day is a sad farce. Trump is so manifestly incompetent and irredeemably corrupt that working through his administration toward reasonable broad based goals is a fool's errand if not simply insane.
Rather than try to fit a square peg in a round hole, Commonplace should articulate its vision and agenda independently of this administration and vigorously criticize it where it is failing. In the medium and long run it will add a lot of credibility to the actual independence of thought of this agenda. Shilling for Trump is anti-reason which is not what Oren is about. It will taint the project if Oren doesn't clearly distance himself. I'm not conservative, but I want CommonPlace and Oren's agenda to succeed. From my worker oriented progressive perspective we agree on virtually all of the important things. Let's get serious about what's Not working.
It’s politically ignorant and silly to argue that American Compass should just walk away from it’s influence in the Trump Administration. The other advice you give they have followed, including pubishing a piece like this one. Oren constantly points out where the Administration gets it wrong.
You also overstate Trump’s involvement. He’s a big picture guy. I doubt he is dictating the specifics of the approach. And if he is, he could be convinced rather easily of a different one if the wiser voices in his Administration won out more.
Thank you for engaging. If I did, I didn’t mean to suggest simply walking away from the current administration. Engagement is important. As you said, Oren does publish articles critical of the Administration’s approach. And I applaud those as I am able with my limited time and capability. The recent article by Sander Tordoir and Oren’s own criticism today of the white house budget requesting expansion of military spending are the most current articles I applaud. Though I’ve not been able to do so explicitly with those yet, I have done so with other articles.
I’m suggesting that buying into this administration’s rhetoric and triumphalism for things that have yet to seriously move the pendulum is bad political strategy. Celebrating “Liberation Day” as though it’s the end of WWII is misguided, politically. Acknowledge policy movement in the right direction and say clearly and directly the failures, relative to Oren’s prescriptions. Do so without spending time berating other economists, which is seriously punching down.
My own rhetorical approach gets a little hot sometimes because I’m deeply offended by this administration’s grift, law breaking, mismanagement, incompetence, and incoherence, along with the wholesale abandonment of decency and decorum. I’m just a random guy whose opinion doesn’t matter, so I’m not going to edit myself more than I already do to appear evenhanded and “neutral”.
Also, I am excited by this “conservative” movement. As a worker oriented progressive I’ve always asserted I could have a good productive conversation with a Burkean conservative. And nothing but vitriol and derision for a libertarian in the course of logically and factually eviscerating them. I’ve always felt the historical (hysterical) overreaction to anything hinting of “communism” or “socialism” among conservatives and Libertarians especially was destructive to clear thinking. That those names were claimed by bad actors doesn’t or shouldn’t define the true meaning and intent of those ideas. That Oren can broach those ideas and definitions with clarity is new and exciting. A conservative who repells knee-jerk Socialism! claims in discussing the need for Government intervention in the “Free Market!” is genuinely refreshing. (As long as intervention is ultimately in the direction of worker empowerment and family security and opposed to cronyism, monopoly and corporate power.)
As to Trump’s involvement..he’s the president. He goddamn well better be involved! The seditious Heritage Foundation, along with Koch Brothers’ long game radical Libertarian usurpation of democracy have made the dangerously absurd unitary executive theory a thing. For Trump! and the spineless congressional GOP (Gang of Poltroons) let it happen. Regarding policy specifics, you suggest “he could be convinced rather easily of a different one if the wiser voices in his Administration won out more.” That’s a bit like saying if trump weren’t trump he would make better choices. That is certainly true. But he is trump so he won’t. And he’s the President. (lots of exclamation points)
Unrelated to all that, I will say I also appreciate Oren’s occasional dry humor. In today’s newsletter, under the headline Welcome to the party, Mr. Dimon:
We were pleased to see these remarks last week from JPMorgan CEO Jamie Dimon: “I think you have to use industrial policy now—I say that reluctantly.”
Congressional malpractice is pretty much the default position on everything. This means all issues get fought out between an overreaching executive and an imperial judiciary. This is not healthy for the republic.
And no, Trump is not channeling W. The important distinction is nation building of which there is no evidence. It may happen but it hasn't and doesn't appear likely.
"Strategic-sector investments were not the main focus of the “Liberation Day” tariff announcements of April 2, 2025."
They most certainly were the main focus. Jesus, just listen to all the interviews done by Scott Bessent, Howard Ludnick and JD Vance. Their messaging has been complete clear as to the basis of the Trump economic plan. Trump himself has been saying the same things for 30 years. He has been opposed to the US-funded global order. The US has been getting ripped off for decades. The American working class has been hammered by the loss of economic opportunity. Industrial capability has fled to countries with cheap peasant labor for corporate profit maximization and corporate primacy. It has hollowed out thousands of communities.
Tariffs from the Trump administration have been fully explained as targeting a correction of these problems.
"A year later, however, efforts to support such investments—both through trade agreements and expanded domestic financing capabilities—may be the most promising developments to result from that chaotic episode."
Again. Expected.
The key to industrial revitalization (especially of exports) and growth is to reduce the federal deficit to no more than the sum of productive public investment. That means, mainly, revenue increases undoing the damage of the GWB, Trump1 and Trump 2 tax cuts. Rolling triffs back to Obama levels will also help.
Strategic‑sector investment wasn’t the point of the April 2, 2025 “Liberation Day” tariffs. Those announcements were major, sweeping tariff hikes. Markets tanked, the harshest measures were paused within a week, and the Supreme Court later ruled that IEEPA doesn’t allow a president to impose tariffs, wiping out much of the package. The broad tariffs also raised costs on imported machinery that U.S. manufacturers still depend on.
The durable outcomes came later, trade negotiators secured new Japan and South Korea agreements that tie lower tariffs to investment commitments in U.S. strategic industries, a structural problem that has driven offshoring for decades.
Context from the prior administration, Between 2021–2024, three major laws, the CHIPS Act, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act, triggered a surge in semiconductor, battery, EV‑supply‑chain, and clean‑energy manufacturing projects. Companies repeatedly cited those laws as the reason for new U.S. facilities, and federal financing tools expanded to support them.
Taken together, the investment‑focused Japan and Korea deals build on an industrial‑policy shift already underway, even though they emerged from the chaos of the 2025 tariff episode.
We have been financializing for the last 50 years drastically and ignoring making stuff we really need for security. All in the name of efficiency and arrogance. Globalization was the mantra of the day and is hopefully finally played out. This globalization was very beneficial to bankers - London (London is not really England both are separate entity's), BIS, reserve banks, TBTF banks, certain politicians, military industrial complex (Pentagon included here big time) and certain well-connected stock/ bond traders.
It will take years to turn this around IF we can. As a businessman in the USA, I would not build crap here. Too risky and too much bad politics here to invest heavily in. I would outsource too.
Especially if the democrat liberals come back into power after the 2028 elections. This would be a game changer and back to banks running the show bigger further corrupt politics, and way more QE to grand scale with no real invest using this liquidity to jack up the economy. All will be dead in the water.
We hopefully are not too far gone. Time will tell.
Oh, Good. More Liberation Day fantasy self pleasuring. Project 2025 is a nearly seditious Heritage Foundation effort. With Trump as the MC it is closer to treason than any spy could ever have managed. Unless, of course, Russ Vought is that Russian spy. In that case, well done, Russ. Now go to prison.
There are quite a number of things about this "project" that are alarming. Mr Krein treads diplomatically around them, refusing to call a spade a spade. First, I should say I totally agree that America is in a dangerous position due to financialization and de-industrialization of the economy over the last half century. Those two trends have been to the serious detriment of US workers and the middle class, not to mention our basic national security. I largely agree with Oren's assessments and many of his prescriptions. The problem is that just because Trump loves the word Tariff, does not mean he understands nor is committed to using it correctly in the larger project of Re-industrialization and De-financialization. Or in any project other than inadvertently creating chaos.
Tariffs are a subtle and very indirect tool to influence industrial investment. I am convinced there is a strategic place for them in the context of a much larger national investment effort. It is that context that is missing. Biden got the ball rolling with the Inflation Reduction Act and the Bipartisan Infrastructure bill. That was proper context. Trump should have Tripled down on that. Trump is instead extracting hand-waving "deals" of foreign investment which, as Mr Krein notes, are being slow walked to wait out this administration. Because Trump's approach is fundamentally NOT how you go about it and everybody understands that except Trump.
We need legislation that promotes the things we want to happen. Investment in the US should be something foreign companies are begging to get in on, rather than being crassly strong armed to pay up. But What is the deal with foreign investment as a metric of how we're rebuilding Our industrial base? We don't need any of it with proper incentives.
Giant shifts of incentive are needed. They will be painful to lobbyists, the politicians they own, and financial sector leeches on productivity. Non productive investment instruments should be banned. Government backed investment in industrial enterprise could then be very compelling. Along with that level of ground shaking change, tariffs could then be useful along with actual import and export bans. To make this happen in any reasonable time frame will require substantial government management of the economy. That's just reality. We've done it successfully before. We should do it as soon as Trump is gone.
I see some in this administration playing around the edges, giving occasional lip service to the idea of helping the working class and rebuilding our industrial strength. But overall, really, nothing but hot air. No legislative initiatives, no clear uniting policy goals, Nothing that matters. Liberation Day is a sad farce. Trump is so manifestly incompetent and irredeemably corrupt that working through his administration toward reasonable broad based goals is a fool's errand if not simply insane.
Rather than try to fit a square peg in a round hole, Commonplace should articulate its vision and agenda independently of this administration and vigorously criticize it where it is failing. In the medium and long run it will add a lot of credibility to the actual independence of thought of this agenda. Shilling for Trump is anti-reason which is not what Oren is about. It will taint the project if Oren doesn't clearly distance himself. I'm not conservative, but I want CommonPlace and Oren's agenda to succeed. From my worker oriented progressive perspective we agree on virtually all of the important things. Let's get serious about what's Not working.
It’s politically ignorant and silly to argue that American Compass should just walk away from it’s influence in the Trump Administration. The other advice you give they have followed, including pubishing a piece like this one. Oren constantly points out where the Administration gets it wrong.
You also overstate Trump’s involvement. He’s a big picture guy. I doubt he is dictating the specifics of the approach. And if he is, he could be convinced rather easily of a different one if the wiser voices in his Administration won out more.
Thank you for engaging. If I did, I didn’t mean to suggest simply walking away from the current administration. Engagement is important. As you said, Oren does publish articles critical of the Administration’s approach. And I applaud those as I am able with my limited time and capability. The recent article by Sander Tordoir and Oren’s own criticism today of the white house budget requesting expansion of military spending are the most current articles I applaud. Though I’ve not been able to do so explicitly with those yet, I have done so with other articles.
I’m suggesting that buying into this administration’s rhetoric and triumphalism for things that have yet to seriously move the pendulum is bad political strategy. Celebrating “Liberation Day” as though it’s the end of WWII is misguided, politically. Acknowledge policy movement in the right direction and say clearly and directly the failures, relative to Oren’s prescriptions. Do so without spending time berating other economists, which is seriously punching down.
My own rhetorical approach gets a little hot sometimes because I’m deeply offended by this administration’s grift, law breaking, mismanagement, incompetence, and incoherence, along with the wholesale abandonment of decency and decorum. I’m just a random guy whose opinion doesn’t matter, so I’m not going to edit myself more than I already do to appear evenhanded and “neutral”.
Also, I am excited by this “conservative” movement. As a worker oriented progressive I’ve always asserted I could have a good productive conversation with a Burkean conservative. And nothing but vitriol and derision for a libertarian in the course of logically and factually eviscerating them. I’ve always felt the historical (hysterical) overreaction to anything hinting of “communism” or “socialism” among conservatives and Libertarians especially was destructive to clear thinking. That those names were claimed by bad actors doesn’t or shouldn’t define the true meaning and intent of those ideas. That Oren can broach those ideas and definitions with clarity is new and exciting. A conservative who repells knee-jerk Socialism! claims in discussing the need for Government intervention in the “Free Market!” is genuinely refreshing. (As long as intervention is ultimately in the direction of worker empowerment and family security and opposed to cronyism, monopoly and corporate power.)
As to Trump’s involvement..he’s the president. He goddamn well better be involved! The seditious Heritage Foundation, along with Koch Brothers’ long game radical Libertarian usurpation of democracy have made the dangerously absurd unitary executive theory a thing. For Trump! and the spineless congressional GOP (Gang of Poltroons) let it happen. Regarding policy specifics, you suggest “he could be convinced rather easily of a different one if the wiser voices in his Administration won out more.” That’s a bit like saying if trump weren’t trump he would make better choices. That is certainly true. But he is trump so he won’t. And he’s the President. (lots of exclamation points)
Unrelated to all that, I will say I also appreciate Oren’s occasional dry humor. In today’s newsletter, under the headline Welcome to the party, Mr. Dimon:
We were pleased to see these remarks last week from JPMorgan CEO Jamie Dimon: “I think you have to use industrial policy now—I say that reluctantly.”
Next time with enthusiasm!
Thank you for the clarification of your criticism. I’ll respond soon.
As thoughtful and balanced a discussion of these topics as I have yet seen. Good job. Let's hope it carries some weight with those running the show.
Congressional malpractice is pretty much the default position on everything. This means all issues get fought out between an overreaching executive and an imperial judiciary. This is not healthy for the republic.
And no, Trump is not channeling W. The important distinction is nation building of which there is no evidence. It may happen but it hasn't and doesn't appear likely.