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The tariff gambit: Trump's long game and America's trade reckoning

On April 2, 2025, Donald Trump stood in the White House Rose Garden, surrounded by a group of advisors, and declared what he termed "Liberation Day.” With

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Some lunch meetings have more impact than others. Ron and Jacob’s once-a-quarter bread-breaking, something they’d held sacred since they met almost four ye

Free people form community

True community emerges when free individuals come together as equals, unburdened by hierarchy or dependency. Yet this ideal is fragile and often undone by

Should the government breakup Google?

The Department of Justice (DOJ), emboldened by a 2024 ruling that Google illegally monopolized online search, is pushing for remedies that could reshape the tech landscape. Headlines scream of breakups, data-sharing mandates, and curbs on artificial intelligence development — an audacious gambit to dismantle one of America’s most iconic innovators. Yet, as John Tamny argues in a provocative RealClearMarkets piece, the case’s headlines betray its fragility, revealing a DOJ that is overreaching into uncharted territory. The question isn’t just whether Google should be broken up, but whether the government’s crusade risks hobbling a titan at a moment when global technological supremacy is at stake.Tamny’s essay skewers the DOJ’s case with a contrarian’s glee. He points to a Bloomberg headline — “DOJ Urges Federal Judge To Break Google’s Search Grip” — and suggests its vagueness masks a lack of substance. “How interesting it would be to focus group the previous headline,” he writes, implying that public support for a breakup might crumble under scrutiny. The DOJ’s August 2024 victory, under Judge Amit Mehta, found that Google’s contracts with distributors like Apple and Mozilla — paying billions to secure default search status — stifled competition. But Tamny argues that the proposed remedies, from divesting Chrome to forcing data sharing, stray far from Mehta’s narrow ruling, venturing into what he calls “lawfare” against a company whose dominance stems from excellence, not malice.The case for breaking up Google rests on a narrative of unchecked power. The DOJ, alongside eight states, contends that Google’s 90% share of U.S. search queries — bolstered by $26 billion in payments to maintain default status — creates an impenetrable moat. Critics argue that this stranglehold harms consumers by limiting choice and innovation. A 2023 piece in The New York Times noted that rivals like Bing and DuckDuckGo struggle to gain traction, not because of inferior technology but because Google’s deals lock them out of prime real estate on browsers and smartphones. The DOJ’s remedy framework, filed in late 2024, envisions a world where Google’s grip is loosened: divestitures of Chrome or Android, bans on exclusive contracts, and mandatory data sharing to level the playing field. Proponents see this as a modern echo of the 1982 AT&T breakup, which spurred telecom innovation by dismantling a monopoly.Beyond search, the DOJ’s ambitions extend to Google’s nascent AI efforts. With AI poised to redefine global power, regulators fear that Google’s vast data troves and computational resources could cement its dominance in this frontier. A 2024 RealClearMarkets piece warned that allowing Google to leverage its search monopoly into AI leadership risks creating a “super-monopoly” that could dictate information flows worldwide. The Biden-Harris administration, in its final months, framed the case as a defense of consumer welfare, arguing that Google’s practices inflate ad prices and degrade search quality by prioritizing paid results over organic ones. Posts on X from April 2025 reflect public sentiment, with some users cheering the DOJ’s push as a check on Big Tech’s arrogance.Yet the case against a breakup is equally compelling, rooted in pragmatism and skepticism of government overreach. Google’s defenders, including Tamny, argue that its dominance reflects consumer preference, not coercion. Judge Mehta’s 2024 ruling acknowledged Google’s “unmatched quality.” He noted that Google’s contracts, while restrictive, were legal agreements with partners like Apple, who chose Google for its superior product. Critics warn that breaking up Google could fracture this ecosystem, degrading services like Chrome and Android that billions rely on. A forced divestiture of Android, for instance, might weaken its competition with Apple’s iOS, paradoxically reducing consumer choice.The AI argument cuts both ways. While the DOJ fears Google’s AI ambitions, others view its $100 billion investment as vital to U.S. leadership in the face of China, where state-backed firms like Baidu face no such antitrust scrutiny. Kneecapping Google’s AI work could cede the field to Beijing, whose vision of AI prioritizes state control over innovation. Google itself, in an April 2025 pretrial brief, warned that a breakup would undermine national security by hampering AI-driven cybersecurity advancements. This resonates in a world where China’s tech giants operate with impunity, unburdened by domestic regulators. Tamny amplifies this, suggesting the DOJ’s push risks “gifting the AI race to China” by hobbling a key American player.Consumer welfare, the cornerstone of U.S. antitrust law, complicates the DOJ case. Critics argue that Google’s free services — search, Maps, Gmail — deliver immense value, subsidized by ads that its dominance makes efficient. Forcing data sharing, as the DOJ proposes, could erode privacy, a point Tamny underscores by questioning why regulators would mandate exposing user data without consent. The DOJ’s remedies also face practical hurdles. Judge Mehta, known for his measured rulings, may balk at proposals that exceed his 2024 findings, which focused narrowly on distribution contracts. The incoming Trump administration adds another layer of uncertainty. With Gail Slater, Trump’s DOJ antitrust nominee, set to take office, analysts predict a shift toward deregulation. Trump, a self-styled businessman, may view Google’s success as a virtue rather than a vice and push for remedies that preserve its global edge.The broader context of U.S. antitrust policy sharpens the debate. A 2023 RealClearMarkets piece noted that American regulators often overlook global competitiveness, unlike their European counterparts, who utilize tools like the Digital Markets Act to regulate U.S. tech giants. Meanwhile, Google’s failed acquisitions, such as those of DoubleClick competitors that flopped, undermine claims of predatory monopolism.As the trial unfolds, the stakes transcend Google itself. A breakup could set a precedent for other tech giants, such as Amazon, Apple, and Meta, which are already under scrutiny. Yet it risks signaling to the world that America punishes success, a message that could embolden rivals in Beijing and beyond. Tamny’s RealClearMarkets piece captures this tension, framing the DOJ’s case as a misadventure that “overreaches beyond reason.” For every argument that Google’s monopoly stifles innovation, there’s a counterpoint that its scale drives it, delivering tools that define modern life.In a courtroom in Washington, Judge Mehta will soon decide Google’s fate. However, the real verdict may lie in the court of public opinion, where headlines shape perceptions as much as facts. Will Google emerge as a villain to be slain or a champion to be preserved? The answer depends on whether one sees its dominance as a threat to freedom or a testament to ingenuity. As Tamny might argue, the DOJ’s case, for all its bluster, may crumble under the weight of its ambitions, leaving Google to search on — flawed, formidable, and undeniably ours.

Trump’s war on Powell: The fight to control the Fed

In the gilded chaos of American politics, where spectacle often trumps substance, a new drama has emerged, pitting President Donald Trump against Federal Reserve Chair Jerome Powell in a high-stakes feud over interest rates. This clash, marked by Trump’s threats to fire Powell and his relentless public insults, is more than a personal vendetta; it’s a collision of economic philosophy, political ambition, and institutional integrity. As markets quiver and gold prices soar, the question looms: Can the Federal Reserve, a cornerstone of global economic stability, withstand the pressure of a president who views its independence as an obstacle to his agenda?The saga began in earnest in April 2025, when Trump, freshly emboldened by his return to the White House, intensified his attacks on Powell. On Truth Social, he dubbed Powell “Mr. Too Late, a major loser,” demanding immediate interest rate cuts to juice an economy he claimed was teetering on the edge of a slowdown. “Unless Mr. Too Late lowers interest rates, NOW,” Trump posted, “the economy risks slowing.” His rhetoric was not new — Trump has long viewed low interest rates as a panacea for economic woes, a reflex rooted in his real estate days when cheap borrowing fueled his empire. However, the ferocity of his 2025 salvos, coupled with explicit threats to oust Powell, has sent shockwaves through Wall Street and beyond.Powell, for his part, has remained steadfast, a bespectacled technocrat unmoved by the president’s bluster. Speaking at the Economic Club in Chicago on April 16, 2025, he warned that Trump’s proposed tariffs — sweeping levies on imports — would likely stoke inflation and raise consumer prices, complicating the Fed’s delicate balancing act. “There’s a strong likelihood that consumers would face higher prices and that the economy would see higher unemployment as a result of tariffs in the short run,” Powell said, his tone measured but firm. This was not defiance for defiance’s sake; it was a defense of the Fed’s dual mandate to control inflation while maximizing employment, a mission that often puts it at odds with political expediency.The Federal Reserve, established in 1913, was designed to be insulated from such pressures. Its Board of Governors, including the chair, is appointed to staggered 14-year terms and can only be removed for “cause” — typically misconduct, not policy disagreements. Yet Trump’s threats to fire Powell have raised a thorny question: Does the president have the legal authority to do so? The Federal Reserve Act is ambiguous on this point, omitting specific limits on the removal of the chair, who serves a four-year term as one of the seven members of the Board of Governors. No president has ever attempted to fire a Fed chair, leaving the issue untested in court. However, related lawsuits over Trump’s earlier firings are winding through the judiciary, with one case pending before the Supreme Court that could set a precedent. Powell himself has been clear: “Our independence is a matter of law,” he said last week, signaling he would not resign if pressed.Trump’s assault on Powell is not merely about interest rates; it’s part of a broader vision to bend institutions to his will. His attacks dovetail with proposals from Project 2025, a conservative blueprint that advocates curbing the Fed’s powers, including stripping its mandate to reduce unemployment and giving elected officials greater sway over monetary policy. Such moves would upend a century of precedent, undermining the Fed’s role as a nonpolitical stabilizer of the U.S. economy — and, by extension, the world’s. The International Monetary Fund, in a rare rebuke, restated the importance of central bank independence after Trump’s tirades, with chief economist Pierre-Olivier Gourinchas warning of market destabilization.Markets have already felt the heat. On April 21, 2025, the S&P 500 tumbled 2.4%, with the Dow dropping 950 points, as Trump’s attacks on Powell fueled fears of a compromised Fed. The U.S. dollar index hit a three-year low, while gold, a haven for jittery investors, surged to a record $3,500.05 per troy ounce. Bond yields spiked, with the 10-year Treasury note climbing above 4.4%, reflecting investor skepticism about the safety of American assets. “The mere possibility that Trump could erode the Federal Reserve’s independence has been enough to unnerve investors and tank the stock market,” Axios reported, warning that an actual attempt to remove Powell could plunge the global financial system into crisis.The irony is that Trump’s own policies may be driving the economic uncertainty he seeks to alleviate. His tariffs, which Powell flagged as inflationary, have already disrupted markets, with the IMF forecasting a significant global slowdown as a result. Lowering interest rates in this context could exacerbate inflation, a point Powell has underscored by holding rates steady since the Fed’s last cut in December 2024. Inflation, though down from its 9.1% peak in June 2022, remains sticky at 2.4% annually, above the Fed’s 2% target. For Powell, cutting rates prematurely risks reigniting price pressures, a lesson learned from the Fed’s post-COVID missteps when it waited too long to hike rates — a delay that earned Powell Trump’s “Too Late” moniker.Trump’s fixation on Powell also reflects a personal grudge. He appointed Powell in 2018, expecting a pliant ally, only to chafe when the Fed raised rates to combat inflation. Now, with Powell’s term as chair extending to May 2026, Trump faces a dilemma: endure a defiant Fed chief or risk a legal and market maelstrom by trying to remove him. Some analysts, like Pimco’s Libby Cantrill, doubt Trump will “pull the trigger,” citing the legal fight and market fallout as deterrents. Others, like Eric Salzman at Racket News, predict Trump will keep up the verbal barrage, making Powell’s life “miserable” until his term ends.The feud has revealed a deeper tension in American governance: the fragile line between democratic accountability and institutional autonomy. The Fed’s independence, although not absolute, has served as a bulwark against short-term political interference, allowing it to make unpopular yet necessary decisions. Yet Trump’s supporters contend that such insulation can slide into unaccountable elitism, a sentiment echoed in posts on X where users celebrate the notion of a president reining in unelected bureaucrats. Critics, however, caution that undermining the Fed’s autonomy could result in spiraling inflation and a loss of global confidence in the dollar, repercussions that would hit ordinary Americans the hardest.As the Supreme Court considers cases that could expand presidential power over federal agencies, the Trump-Powell showdown may soon test the boundaries of law and precedent. For now, Powell remains a “steady hand,” as one portfolio manager put it, a symbol of stability amid Trump’s tempest. However, stability, in this era of unrelenting disruption, is a fragile thing. The markets, like the nation, are watching, waiting for the next tweet, the next threat, the next move in a game where the stakes are nothing less than the economic future.

The tariff gambit: Trump's long game and America's trade reckoning

On April 2, 2025, Donald Trump stood in the White House Rose Garden, surrounded by a group of advisors, and declared what he termed "Liberation Day.” With a stroke of his pen, he imposed a sweeping range of tariffs -10 percent on all imports, with higher rates of 34 percent on China, 24 percent on Japan, and 25 percent on Canada and Mexico (later reduced for USMCA-compliant goods). The announcement, presented as a national economic emergency under the International Emergency Economic Powers Act, sent shockwaves through global markets. The S&P 500 dropped nearly 5 percent the following day, its worst decline since June 2020, while gold surged to $3,100 an ounce amid inflation concerns. Economists, business leaders, and foreign allies rushed to analyze the consequences, while Trump, ever the showman, celebrated it as the culmination of a promise he had been making for four decades.Trump’s fixation on tariffs isn’t new. It dates back to the 1980s when he was a brash real estate mogul criticizing Japan’s trade practices in interviews and op-eds. By June 16, 2015, when he descended the Trump Tower escalator to announce his presidential bid, tariffs and trade deficits were already his rallying cry. "China has our jobs, and Mexico has our jobs," he declared during his announcement speech, promising to reverse decades of what he viewed as America’s economic surrender. Now, nearly ten years later, with the U.S. trade deficit with China reaching a staggering $295.4 billion in 2024 under the Biden administration — an all-time high — Trump’s tariff crusade feels less like a campaign stunt and more like a personal vendetta turned policy cornerstone.The roots of the deficit: NAFTA and Clinton’s legacyTo understand Trump’s fervor, one must rewind to the 1990s, when the North American Free Trade Agreement (NAFTA) reshaped the U.S. economy. Signed by President Bill Clinton on December 8, 1993, NAFTA was heralded as a bipartisan triumph, with Clinton flanked by luminaries like George H.W. Bush and Bob Dole. "We’re going to create hundreds of thousands of jobs," Clinton proclaimed, envisioning a borderless North American market.Since the 1990s, the U.S. has lost a significant number of manufacturing jobs — decreasing from 16.8 million in 1993 to 12.4 million by 2016, a 26 percent decline. The auto sector experienced the loss of 350,000 jobs as production moved to Mexico, where employment surged from 120,000 to 550,000. The textile industry fared worse, witnessing nearly a 90 percent decline in employment as China and Mexico filled U.S. shelves. Clinton’s free-trade vision, while stimulating GDP, left behind a landscape of shuttered factories, a reality that Trump capitalized on. By 2025, the White House claims that 5 million manufacturing jobs have disappeared since 1997, a figure that, while debated, supports Trump’s narrative of betrayal by globalist elites.Trump’s case: A reckoning with ChinaTrump’s tariff salvo is fundamentally a response to this history and to China’s significant trade deficit with the U.S., which rose to $295.4 billion in 2024. This imbalance, overshadowing the $6 billion deficit of 1985, illustrates China’s emergence as a manufacturing powerhouse, driven by state subsidies, low wages, and, until recently, currency manipulation. Trump’s "reciprocal tariff" formula — calculating the deficit divided by imports and then halving it — produced China’s 34 percent rate, a blunt tool to penalize what he refers to as "cheaters." His advisors, including Peter Navarro, contend that this will bring jobs back to America, reflecting Trump’s long-standing concern that the country’s openness has been taken advantage of.The benefits of this approach resonate with Trump’s base. Tariffs could generate $100 billion in revenue, according to White House estimates, helping to offset a federal deficit that is ballooning toward $1.8 trillion. Ford’s Jim Farley may warn of a "hole" in U.S. industry, but Trump responds that 50 percent of cars sold in 2024 were imported — why not manufacture them here? His first-term tariffs on steel and aluminum, after all, spurred some domestic growth, and the USMCA, which he pushed through to replace NAFTA, strengthened rules to favor American workers. For Trump, the trade deficit with China isn’t just statistics — it represents a symbol of lost sovereignty, a grievance he’s harbored since the Reagan era.Mitt Romney’s presidential campaigns provide an interesting parallel. In 2008, he scarcely addressed China or tariffs, concentrating instead on domestic issues during the financial crisis. By 2012, confronted with a struggling industrial heartland, he made a significant shift. "I will crack down on cheaters like China," he proclaimed, promising to label Beijing a currency manipulator on the first day and impose tariffs. This stance was tougher than his free-trade inclinations as a Bain Capital executive, indicating political expediency. Trump, however, has surpassed Romney’s rhetoric, transforming a campaign promise into a second-term crusade, driven by the conviction that China’s $295.4 billion deficit in 2024 supports his argument.The drawbacks: Friedman’s ghost and modern warningsYet, Trump’s tariff triumph is accompanied by a chorus of dissent, reflecting the free-market principles of Milton Friedman. The Nobel laureate, a giant of the Chicago School, regarded tariffs as an economic sin. "They raise prices for consumers and waste our resources," he wrote in 1993, arguing that free trade benefits everyone by allowing nations to specialize. In "The Case for Free Trade," he debunked protectionist myths — exchange rates, not tariffs, balance wage disparities, he argued — and advocated for unilateral free trade, a radical idea that Trump scorns. Friedman’s influence is significant: tariffs, he would contend, would drive iPhone prices to $2,300, according to Rosenblatt Securities, impacting consumers the most.Contemporary economists amplify this critique. The Budget Lab at Yale predicts a one-point decrease in GDP by 2025, with unemployment rising from 4.2 to 4.7 percent, potentially costing millions of jobs, according to Harry Holzer of Brookings. Nomura Securities forecasts a modest 0.6 percent GDP growth, with inflation approaching 4.7 percent. Reuters warns of a global trade war, with JPMorgan estimating a 60 percent chance of recession by year-end. Lawrence Summers, former Treasury Secretary under Clinton, described Trump’s plan as "dangerous and damaging," likening it to "creationism in biology." The IMF’s Kristalina Georgieva anticipates a decline in global growth from 3.3 percent, while Fitch’s Olu Sonola points out that the U.S. tariff rate — now at 22 percent — matches levels seen in 1910, risking a Smoot- Hawley repeat.Businesses already feel the pinch. Stellantis has shuttered a Windsor plant for two weeks, idling 3,600 workers, as Canada retaliates with 25 percent tariffs. The Beer Institute is concerned about a 25 percent tariff on aluminum cans, which threatens a $7.5 billion industry. The OECD projects that U.S. growth will slide to 1.6 percent in 2026, a stark drop from 2.8 percent in 2024. Critics argue that Trump’s formula misreads trade deficits — driven more by U.S. consumption than by foreign barriers, according to the U.S. Chamber of Commerce — inviting chaos rather than clarity.The verdict: A high-stakes betTrump’s tariff gambit is a high-wire act, balancing visceral appeal with economic peril. On one side, it’s a populist outcry against a $295.4 billion Chinese deficit, a 40-year obsession now transformed into policy. It promises jobs, revenue, and a manufacturing renaissance, tapping into genuine pain — those 5 million jobs lost since 1997 and the devastated towns NAFTA left behind. Romney’s 2012 pivot demonstrated that this chord resonates; Trump’s just playing it louder. Yet, Friedman’s logic and modern forecasts warn of a boomerang effect — higher prices, global retaliation, and a recessionary spiral that could overshadow any gains.The trade deficit with China, peaking in 2024, serves as Trump’s Exhibit A, yet his solution risks fracturing a world economy he claims to save. For every factory revived, a consumer pays more; for every dollar in tariffs, a market trembles. As the Nikkei, FTSE, and S&P reel, Trump’s "Liberation Day" may liberate America from one burden only to bind it to another. Four decades in the making, this is his moment — but whether it ends in triumph or tragedy depends on a ledger still unwritten.