Without tariffs, the US is defenseless in an economic war



The Second Amendment guarantees the right of citizens to bear arms. Many conservatives argue that this is the most important right. Why? Our other core rights — freedom of religion, speech, and assembly — are worthless if they cannot be defended. Firearms safeguard freedom.

Yet these same conservatives have viciously attacked President Trump’s recent 25% tariff on steel and aluminum imports, describing it as “political rent-seeking at its most brazen.” Some self-styled nonpartisan critics even claimed that Trump’s tariffs are an “unconstitutional power grab.”

America does not even manufacture the things it would need to use to manufacture more things.

These criticisms are not only unfounded; they are also completely backward. Why? The trade deficit is among the greatest — yet most ignored — threats to America’s freedom. America needs tariffs to eliminate the trade deficit and safeguard our national security.

A lovely bunch of coconuts

The trade deficit undermines America’s national security because of something called import dependency. Import dependency occurs when a country cannot sustain itself without imports. This often occurs when countries lack a specific natural resource.

For example, Iceland is too cold to grow coconuts and must buy coconuts from tropical islands. In this way, Iceland is import-dependent when it comes to coconuts. Import dependency may not sound important — coconuts are not vital to Iceland’s economy — but what if we replaced coconuts with oil? You can imagine that Icelandic winters would be much less hospitable without fuel.

Even less obvious is the threat posed by dependence on imported manufactured goods, like silicon chips. How could Iceland maintain a modern economy without access to computers? It could not. To make matters worse, it is obvious that whoever controlled the supply of computers into Iceland would wield enormous political leverage over the Icelandic people — do what we say or no computers for you!

The reality is that any country that depends on imports is vulnerable in this way. One of the best historical examples of the dangers of import dependence occurred during the American Revolution. Although this may come as a surprise, the American Revolution almost failed because the colonies could not manufacture enough cannons, firearms, and gunpowder to resist the British — our former supplier.

It was only when Britain’s European rivals, particularly the French and Dutch, started supplying the Continental Army that the tide turned. For example, France alone supplied the army with over 80,000 firearms, in addition to swords, knives, and uniforms. America depended upon British manufactured goods, and it was not until this economic dependence was broken that America could free herself from the imperial yoke.

President George Washington recognized this fact, writing that America would not be able to defend its freedoms unless the nation was “independent of others for essential, particularly military, supplies.” To this end, his first major piece of legislation was the Tariff Act of 1789, which raised taxes on imported manufactured goods.

One of the legislation’s key aims was to promote the development of America’s manufacturing industry. Even Thomas Jefferson — who initially supported free trade on principle — eventually agreed with Washington. In the wake of the War of 1812, Jefferson wrote:

Experience has taught me that manufactures are now as necessary to our independence as to our comfort: and if those who quote me as of a different opinion will keep pace with me in purchasing nothing foreign where an equivalent of domestic fabric can be obtained, without regard to difference of price [we would be well off] …

Both Washington and Jefferson realized that economics and politics are simply two sides of the same coin. Therefore, to safeguard America’s political independence, we must first maintain America’s economic independence.

My kingdom for a (Chinese-made) horse

The American colonies depended on European imports to wrestle our freedom from the British. Today, we depend on Chinese imports.

Consider that America no longer manufactures enough of the sorts of basic machinery necessary to make simple household items — never mind the sophisticated electrical components needed for computers and smartphones. In other words, even if we wanted to manufacture forks, we would probably need to buy the fork-making machinery from China.

This is made clear when we look at America’s production of machine tools. A machine tool is a piece of machinery that shapes its output by removing material by way of lathing, planning, drilling, milling, grinding, sawing, or pressing the output. Machine tools transform raw materials into something useful. They are the tools that make tools.

America used to be the leading manufacturer and global exporter of machine tools. Today, America imports of most its machine tools and only produces 7% of the world’s machine tools. For comparison, Italy produces 8%, while China makes 29%.

America imports over $500 billion worth of advanced technology products from China every year. Our industrial base has been hollowed out to the point where we could not maintain our economy without imported machine tools and semiconductors — never mind all the innocuous goods that we import like cutlery and baseball caps.

America is import-dependent upon China. This restrains America’s ability to act independently on the world stage and gives China leverage over America in any prospective military engagement.

What would happen if conflict erupted between America and China? Presumably, the United States would need to scale up its industrial production to build more weapons, vehicles, and computers. Just one problem: scaling up is just not possible — at least not immediately.

To manufacture more equipment, America would need to build more factories. But the United States imports almost all its industrial components and machine tools. That is, America does not even manufacture the things it would need to use to manufacture more things.

Worse yet, America’s workforce lacks the training and experience to manufacture critical goods. What would happen, for example, if China stopped selling microchips? Even if we assume that America has the tools to manufacture microchips — which we do not — we do not have the human capital to manufacture microchips on a large scale. Very few Americans know how to make microchips. For that matter, very few Americans have the skills to build the factories themselves.

If the United States were serious about national security, it would make reducing the trade deficit and restoring industrial self-sufficiency its top priority.

America Is Paying The Hefty Social Cost Of ‘Free’ Trade

As we are learning, cheap textiles, electronics, and avocados can be very expensive.

GOP’s growth meal: Appetizers ease regs, main course drives jobs



If policymakers want strong results, history and economic reality identify small businesses as the catalyst for growth. As a new Republican Congress and the incoming Trump administration view their menu of options, it’s imperative they view things from an appetizer and main-course perspective. The main course is bonus depreciation and access to capital, and the appetizers are reducing regulatory burdens, taming government overreach, lowering energy costs, and finding skilled and qualified workers.

The new Trump administration and the GOP-led Congress must serve up the appetizers and main course to fuel new record growth. Here’s what that meal might look like.

The appetizers

The increase in onerous regulations imposed by local, state, and federal governments is generating louder, justified complaints from small businesses. By April 2024, the cost of federal regulations had ballooned to $1.47 trillion. These rising costs are stifling small businesses. According to the October 2024 jobs report and downward revisions in new job creation, employment is weakening across the U.S. economy.

Industries are feeling the regulatory squeeze, and small businesses are suffering — especially in the wooden pallet industry. Ninety percent of all goods in the United States come into contact with a wooden pallet at some point. Regulatory burdens on the forest-products industry, such as reduced availability or higher costs of environmental permits, directly lower the supply of wood and increase its cost. And because wood pallets are manufactured, businesses in this sector must navigate OSHA oversight, air-quality permits, and trucking-related regulations. Customer-related rules, such as the Food Safety Modernization Act, also pass additional costs to pallet manufacturers.

If President Trump and congressional Republicans implement a comprehensive strategy, they could ignite a surge in economic growth the likes of which we’ve never seen.

Easing regulations would help small businesses lower their costs, enabling many to reinvest those savings in new plants, equipment, and workers.

The Trump administration should aggressively reduce the costly regulatory burdens on small businesses through executive actions. These actions should include initiatives to lower energy costs, which would further reduce expenses for small businesses. For manufacturing companies, lower costs would allow them to redeploy capital toward modernizing plants and fostering innovation.

Businesses, particularly small businesses, are struggling to attract new workers. Increased investment in career and technical education at the federal and state levels is essential. Such investment will help create future pipelines of skilled, motivated, and qualified workers.

The tooling and machining industry, which includes thousands of small to medium-sized precision machining manufacturers, serves a wide range of sectors, including aerospace, ordnance, defense, medical, space, electronics and semiconductors, oil and gas, automotive, and more. The lack of a skilled and qualified workforce remains the top challenge and limitation for precision machining.

The main course

The pathway to long-term economic and jobs growth is permanent write-offs for capital expenditures that include both plants and equipment.

To jump-start growth, a 100% bonus provision for plants and equipment for the first year followed by a consistent allowance for plants and equipment in the following years is essential. A heightened level of capital investment gets factories moving, makes small businesses more competitive, and drives higher employment levels and long-term growth.

In a “2 Way Community” conversation with Mark Halperin, Scott Bessent, founder and chief investment officer of Key Square Group and Donald Trump’s nominee to lead the Treasury Department, indicated that “100% expensing for equipment is on the table as part of the extension of the Trump Tax Cuts and Jobs Act Job.” He also expressed support for “a limited life for structures that can also be expensed by 100%.”

Small businesses in the landscaping and fertilizer industries, for example, would be in a better position to invest in newer technologies and expand their production and distribution capacities.

Small businesses also have increasing capital requirements associated with the drive to automation, the high costs of machinery, and the need for research and development. To remain competitive, small businesses must also have an R&D tax credit available to them. Small businesses operating in the crane, rigging, and heavy transport sector will be able to invest in new cranes and other equipment and have the capacity to grow their businesses.

Every small business must have access to capital. New legislative and regulatory efforts must increase access to capital through streamlined small-business lending. Because 38% of small businesses that fail do so due to lack of capital, there must also be a renewed commitment to community banks, which are essential for small businesses to access capital. Bessent has also expressed support for this idea.

Making the 2017 Tax Cuts and Jobs Act permanent and adding these additional incentives will change the game and launch a new wave of economic growth. Several key provisions are already expiring or will be phased out at the end of 2025. Expensing for business investments, research and experimentation deductibility, pass-through deductions, and a reduction of the estate tax concludes on December 31, 2025. These are important and should be continued.

Small businesses have historically driven economic recovery and prosperity. If President Trump and congressional Republicans implement a comprehensive strategy, they could ignite a surge in small-business activity and economic growth the likes of which we’ve never seen.

Gov. Abbot's Asia tour champions a new era of American manufacturing, tech growth



Last week, Gov. Greg Abbott (R-Texas) returned from his economic development trip to Taiwan, Japan, and South Korea, where he “met with company executives, business leaders, foreign dignitaries, and government officials to promote Texas’ booming economy and drive progress in industries that are critical to the future of the global economy,” according to a press release from the Office of the Texas Governor.

Over the course of Gov. Abbott’s governorship, Texas has attracted billions of dollars in new investment into semiconductor manufacturing from Asian companies, creating thousands of high-paying jobs for Texans. GlobiTech, a subsidiary of Taiwan-based GlobalWafers Co., Ltd., is establishing a manufacturing plant in Sherman, Texas, that provides silicon epitaxy products to the semiconductor industry. Similarly, Samsung has set up shop for chip manufacturing in Austin, Texas, partly due to Gov. Abbott’s policies.

Gov. Abbott has provided a rough guideline of a successful 'America First' economic policy. If former President Trump wins the presidential election, it would be wise to implement an industrial policy that counterbalances the potential short-term price hikes that result from his proposed universal tariff.

During his trip, Gov. Abbott also stressed the importance of AI and space exploration and collaborating with East Asian countries since “the winners of the AI race will be winners of the world.” Abbott also announced the creation of a State of Texas office in Taipei, Taiwan, a new Samsung steel manufacturing plant in central Texas, emphasizing the necessity to forge economic relationships with key allies, restore manufacturing in vital sectors, and reduce overreliance on China.

“This mission helped strengthen our economic and cultural partnerships with Taiwan, South Korea, and Japan,” said Governor Abbott in the press release. “As Texas looks toward the future, it’s crucial that we continue to provide leading businesses from around the world with the opportunities to thrive and succeed in our great state. By visiting with business and government leaders in Taiwan, South Korea, and Japan, our ongoing collaboration in emerging industries will grow stronger for years to come. Working with our global partners across the Pacific, we will forge the future of innovation.”

A new conservative economics

American political leaders have always been keen on meeting with foreign leaders to bolster economic activity. However, Gov. Abbott’s recent Asia trip and his expressed willingness to form coalitions to revitalize domestic manufacturing are among the many markers of a new economic policy forming on the center-right.

Like traditional neoclassical economics, this new conservative economics focuses on supply, promotes free markets and deregulation, and encourages trade. However, its nationalism and pragmatism open it to a more interventionist industrial policy, advocating for investment in research and development and subsidies for key manufacturing sectors, which are vital for American economic and national security interests.

David P. Goldman, deputy editor of Asia Times and Washington fellow at the Claremont Institute’s Center for the American Way of Life, told Blaze Media that he believes “semiconductors are the most critical of industries, because all modern economic activity depends on them.”

“There is a very strong case for domestic production under secure conditions of chips used by the military or critical infrastructure. In that respect, the CHIPS Act addressed an urgent need. It did not address it especially well, however,” Goldman said. “Lack of skilled labor and infrastructure led to long delays in TSMC's and Samsung's plans to build chip fabrication plants in the US, and the price index for new industrial plant construction rose by nearly 30% in response to new investment supported by the CHIPS Act. Our allies Japan, South Korea and Taiwan can only do so much; we urgently need to train skilled labor and technicians and upgrade our infrastructure. The states can play the key role in training through their university systems.”

As America faces the looming threat of China and the supply-chain consequences, he and many others have put aside the standard neoliberal economic orthodoxy and embraced a new conservative economics.

Less than a year after Congress passed the CHIPS Act, Gov. Abbott signed the Texas CHIPS act, “establishing the Texas Semiconductor Innovation Consortium (TSIC) and the Texas Semiconductor Innovation Fund (TSIF) … [that] leverage[s] Texas’ investments in the semiconductor industry, encourage semiconductor-related companies to expand in the state, further develop the expertise and capacity of Texas institutions of higher education, and maintain the state’s position as the nation’s leader in semiconductor manufacturing,” according to Texas Economic Development & Tourism.

When the legislation was proposed, Gov. Abbott called it “a national competition to design and build the future of semiconductors.” He continued and said, “it is a race that Texas must win for our state, our workforce, our national security, and our future. With this legislation, Texas will not only remain number one in America for semiconductors — we will be number one in the world.”

Since then, Texas has become one of the primary hubs for chip manufacturing. Gov. Abbott has provided a rough guideline of a successful "America First" economic policy. If former President Trump wins the presidential election, it would be wise to implement an industrial policy that counterbalances the potential short-term price hikes that result from his proposed universal tariff. However, Trump’s global tariff would help rebalance America’s critical trade deficit. It may even be deflationary, and with policies that help fund capital-intensive projects vital to American interests, we could see long-term benefits for American industry.

The new right’s economic policy shows the eminence of economic security and independence from China. The trip highlighted the imperative that if America wants to regain the economic dominance it once had, America must be number one in semiconductor manufacturing, and adopting a robust industrial policy might just put us a significant step closer.

Not A Single Manufacturing Job Was Created In March Despite Biden Admin Spending Billions To Do So

Machinery manufacturing lost 2,500 jobs and primary metal manufacturing lost 1,000 jobs

Androids are marching onto the production line at BMW



Restless chrome androids are set to march onto the production line at BMW.

The German automotive company recently signed a commercial agreement with the California-based robot manufacturer Figure to use its humanoid automatons in "automotive manufacturing environments."

The Figure 01 is a 5'6" android that weighs 132.2 pounds and can supposedly work for five hours before requiring a recharge. According to the company, the humanistic simulacrum can move at a speed of nearly 2.7 mph and can lift up to 44 pounds. In addition to stumbling about where humans once worked and lifting boxes, the android can apparently also open doors, use tools, and climb stairs.

— (@)

Robert Engelhorn, president and CEO of BMW Manufacturing, said in a statement, "The automotive industry, and with it the production of vehicles, is evolving rapidly. BMW Manufacturing is committed to integrating innovative technologies in our production systems to drive our future forward as an industry leader and innovator."

"The use of general purpose robot solutions has the potential to make productivity more efficient, to support the growing demands of our consumers, and to enable our team to focus on the transformation ahead of us," added Engelhorn.

Brett Adcock, CEO and founder of Figure, said, "Single-purpose robotics have saturated the commercial market for decades, but the potential of general purpose robotics is completely untapped. Figure's robots will enable companies to increase productivity, reduce costs, and create a safer and more consistent environment."

Figure's agreement with BMW reportedly allows for a staged deployment. First, the robotics company will look for "initial use cases" where its androids can be deployed. Once opportunities for automation are identified — likely areas presently occupied by inspirited human workers — Figure's androids will be trotted out, beginning with the car company's facility in Spartanburg, South Carolina.

Adcock told Axios, "I think the next 24 months you'll start seeing humanoid robots in the real world."

The relative cost of this replacement workforce will likely be driven down by fierce competition. After all, Figure's deal with BMW may be the first of its kind, but it's not the only android game in town.

Sanctuary AI, a Vancouver-based company, has created a general-purpose robot called Phoenix. Powered by the Carbon AI control system, Phoenix has a competitive payload of 55 pounds and a max speed of 3 mph.

Norway's OpenAI-backed 1X has already made its EVE android available for purchase. EVE is 6'2", 192 pounds and has a top speed of 9 mph. It tops the Figure 01 on battery life with a six-hour run time and can lift 33 pounds. While autonomous, human operators can also reportedly control a fleet of EVEs, tapping into their cameras.

Ix admits on its website that its androids can automate jobs traditionally performed by humans, suggesting that those put out of work "can also be trained for more complex roles."

Boston Dynamics' Atlas is another competitor in the field, albeit a headless one. Atlas can travel at 2.5 m/s, weighs 196 pounds, and is nearly five feet tall. Unlike other androids, Atlas is relatively nimble and capable of performing various acrobatic feats.

Tesla's Optimus bot appears to be lagging behind the pack of job-killers. Nevertheless, South African billionaire Elon Musk recently indicated Optimus can now fold a shirt.

— (@)

Markets and Markets reported last year that the size of the global android market last year was $1.8 billion. It is, however, projected to grow to $13.8 billion by 2028. This growth is expected to be driven largely by demands in the medical and hospitality sectors. There will reportedly also be opportunities for android deployment in different fields of rescue operations.

The announcement of the Figure-BMW android deal came just days ahead of the release of a MIT study that suggested that the threat of AI automation soon taking over various human jobs — hyped by previous reports — may be overblown

After conducting a cost breakdown of what it would take to replace various workers on vision-based tasks with AI-powered systems, the researchers concluded, "We find that at today's costs US businesses would choose not to automate most vision tasks that have 'AI Exposure,' and that only 23 [percent] of worker wages being paid for vision tasks would be attractive to automate."

Neil Thompson, co-author of the study and an investigator at MIT Computer Science & Artificial Intelligence Laboratory, noted that the study indicated "a more gradual integration of AI into various sectors, contrasting with the often hypothesized rapid AI-driven job displacement."

Adcock suggested to Axios that Figure 01 "can do basically everything a human can."

The Figure CEO is not the only one who appears bullish on the prospect of a tin man workforce.

The Wall Street Journal indicated earlier this month that expensive union contracts have prompted greater interest among carmakers in automation.

Laurie Harbour, president of Michigan manufacturing consulting firm Harbour Results, told the Journal, "Automation is the future. More so than we've ever seen."

"There's robots in every factory," United Auto Workers president Shawn Fain recently told Independent Sen. Bernie Sanders (Vt.). "The companies have used technology as a way to cut jobs instead of interjecting robots and technology to make our jobs easier."

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