Most of Trump’s policies are based on common misconceptions and in fact contradict established economic principles.. To begin with, the U.S. government often subsidizes companies to keep operations domestic. This can make our products more expensive and our businesses less efficient and competitive. A notable example is electric vehicles (EVs). The U.S. heavily subsidizes EVs, yet we claim we are not, instead asserting that China does this without evidence. Consequently, we impose a 100% tariff on Chinese EVs. As a result, the U.S. lacks competitively priced, domestically produced EVs. Our EV industry has become uncompetitive and inefficient, while China has emerged as the powerhouse of EV manufacturing worldwide. This is just one example of how U.S. misunderstandings of trade have led to our own decline while contributing to China’s rise. These policies have been both Republican and Democratic. Trump’s policies, which are even more misguided and are intended to do this to every industry, are set to accelerate our decline rapidly. World economists estimate that our economy will be devastated within 1 year and 9 months.
For more information on this example see “BYD” and NEV sales. For another devastating example of protectionism see “Deep Seek” and large language model AI.
Protectionist policies have significantly influenced the global landscape of artificial intelligence (AI) and electric vehicles (EVs), creating distinct winners and losers across various industries.
Beneficiaries:
- China:
- BYD: A leading Chinese EV manufacturer, BYD has capitalized on domestic support and reduced foreign competition due to protectionist measures.
- DeepSeek: This Hangzhou-based AI startup has emerged as a formidable player, developing advanced AI models like DeepSeek-R1. Notably, DeepSeek achieved these advancements at a fraction of the typical cost and energy consumption, democratizing AI development and enabling smaller firms to compete.
Adversely Affected:
- United States:
- Automotive Companies: Major U.S. automakers such as Ford and General Motors face challenges from increased tariffs and restricted access to international markets, impacting their competitiveness in the EV sector.
- Technology Firms: Leading tech companies, including Nvidia, Intel, IBM, Qualcomm, Cerebras Systems, Graphcore, Tesla, Baidu, OpenAI, SambaNova, Microsoft, and Apple, have encountered setbacks due to protectionist policies. For instance, Nvidia experienced a significant decline in market capitalization following DeepSeek’s announcement of its R1 model, highlighting the disruptive potential of emerging competitors. For an idea of how costly protectionism can be to the US, Nvidia lost $593 billion in market value the day Deep Seek was announced.
The ripple effects of protectionism extend beyond these industries, notably impacting the energy sector—encompassing electricity, natural gas, and nuclear power—due to shifts in production and consumption patterns driven by evolving trade policies.
Beyond economic implications, protectionist measures can lead to significant technological and military consequences, as nations may struggle to access critical innovations or maintain strategic advantages in key sectors.
If you are interested in a historical example, the Smoot-Hawley Tariff Act of 1930 raised tariffs on imports to the United States, which contributed to the Great Depression. In fact, Trump’s policies, combined with bypassing the law and ignoring the Constitution by not having Congress codify legislation, make it appear as though our current economic downturn is accelerating. This is why world leaders and economists are not overly concerned; most agree they will tolerate current U.S. policies creating economic instability and that the collapsing economy will occur before the midterms. After the midterms, he will likely be toothless, if not impeached.
Tesla vs. BYD