OPINION
Despite early apocalyptic stagflation predictions by man economists, President Donald J. Trump’s tariffs are delivering increased economic growth and decreased inflation.
The very pundits who once forecast spiked inflation and a recession now confront a reality they failed to imagine — the resurgence of U.S. industry.
The numbers speak for themselves: GDP growth for the second quarter and predicted for the third quarter are close to 4% and the GDP deflator which is the most comprehensive measure of economy wide inflation, is down in 2025 to the Fed target of 2%.
Real wages for blue-collar workers have seen large increases following declines during Biden, manufacturing employment has risen, and forward looking spending on investment such as plant construction has surged to record levels.
Financial markets, which are also forward-looking, are breaking records.
As President Trump’s policies produce a resurgence, it’s inevitable that companies will attempt to take advantage by lobbying for greater government favors and interventions to undermine their competitors.
However, this rent-seeking will only set back the remarkable progress President Trump has been making each day.
The Trump administration must recognize that the anti-competitive effects induced by these companies will only raise costs, slow innovation, or reduce economic performance.
Trump must not repeat allowing for a massive lobbying campaign such as that surrounding Biden’s Inflation Reduction Act (IRA).
Solar, wind, and electric vehicle companies tried to leverage their small manufacturing presence in the United States to keep the spicket of massive subsidies flowing.
Ultimately, Republicans in Congress and the Trump administration recognized that the government largesse propping up this industry was not only harming taxpayers but also reducing actual innovation that may one day replace current energy forms.
Many companies today are trying to use government in the same detrimental way.
Take Whirlpool, once a standard-bearer of American manufacturing, who when faced with increased global competition and lackluster results, recently launched what looked less like a business strategy and more like a government centered media campaign designed to damage its rivals.
First, it fed “concerns” to U.S. Customs and Border Protection, alleging that competitors were dodging tariffs.
Mere days later, these claims surfaced in national media outlets, a conveniently timed blitz aimed at trying competitors in the court of public opinion before the facts were in.
But the facts, as they often do, told a different story.
Earlier this month, The Wall Street Journal reported, “Federal officials say they have found no evidence of widespread undervaluing of imported appliances after Whirlpool accused its rivals of possible tariff evasion.”
In plain terms: the accusations didn’t hold water.
So why would a major U.S. manufacturer resort to this kind of maneuvering?
The answer is clear.
When it’s easier to steer government to your advantage than it is to run a successful business, that’s what you try to do.
Whirlpool has been cutting jobs across the Midwest for years.
Rather than retooling, innovating, or competing, they opted for a shortcut: regulatory entanglements and public relations salvos.
Whirlpool needs government help because competitors are competing and investing.
For example, GE Appliances recently announced a $3 billion commitment to modernize and expand its U.S. factories over the next five years, creating more than 1,000 jobs.
In addition, Samsung and LG continue to pour billions into American operations, from Tennessee to Texas.
The Trump revival underway is real, but all the new tariff-based opportunities to lobby D.C. puts its benefit to American workers and consumers at risk.
Its future will depend not just on sound trade and tax policy, but on whether American companies are willing to embrace the ethos that made this country an industrial superpower: resilience, competition, and a refusal to seek shelter from bureaucracy.
The Trump economy should not reward lobbyists and under-performing whiners — it should reward those who create real value.
Tomas J. Philipson is an economist at the University of Chicago and served as a member and acting chairman of President Trump’s Council of Economic Advisers from 2017 to 2020.
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