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JUDGE THE ACTUALLY EXISTING TRUMP ECONOMY, NOT THE THEORY  
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David Dayen
August 28, 2025
The American Prospect
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_ Equity stakes, loophole closures, and protecting domestic
industries might make sense in someone else’s hands. Not from a
president with no strategy or plan. _

President Donald Trump holds a signed executive order during an event
to announce new tariffs, in the Rose Garden of the White House, April
2, 2025, in Washington, (Evan Vucci/AP Photo).

 

One of the biggest biases in American life is the idea that
Republicans are “good for business.” But if you’re a business
with any need to receive commercial parcels from other countries,
Republicans are pretty bad for you right now.

Numerous industrialized countries throughout Europe and Asia have
suspended business parcel shipments
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to the U.S. in advance of a Friday change to the so-called de minimis
rules. In most countries, only letters and gift parcels under $100 are
being let through, though postal services in Italy
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Lithuania
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Bosnia-Herzegovina
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Thailand [[link removed]], the
Czech Republic
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and others have suspended sending all packages to the U.S. regardless
of value. E-commerce firms like Etsy
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and eBay
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have also suspended shipping of U.S.-bound parcels from some
countries. Private shippers like FedEx could be used, though that will
be much costlier.

Before this year, any shipment valued under $800 was allowed to enter
the country without duties or inspection. This created a surge of
packages, primarily from China, getting around normal shipping
processes, thus enabling Chinese e-commerce retailers like Shein and
Temu to charge shockingly low prices for goods suspected
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of being made with slave labor
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and violating copyright
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As Shein and Temu grew, textile factories across the U.S. shut down
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and lawmakers searched for a solution.

Back in May, the Trump administration ended the de minimis exemption
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for China and Hong Kong, after an initial order was delayed
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for three months because no structure for collecting that many tariffs
and conducting that many inspections—millions per day—was laid
out. The administration appears to have done the exact same thing on
packages from other countries, advancing the policy before devising
the infrastructure. (International posts can use the same system they
use for packages over $800, but obviously they do not have faith in
being able to do it at scale.)

International postal services are obligated under the Trump order to
collect the duties and taxes, and they need systems in place to do
that. There are third parties like Zonos
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that are certified to collect on behalf of an international postal
system, and that might be a work-around, but those relationships have
to be established. There’s an actual international system to smooth
out these kinds of disputes called the Universal Postal Union, but
good luck getting the Trump administration to submit to the dictates
of an international consortium.

I should say that this isn’t _that _big a deal. As Lori Wallach of
Rethink Trade pointed out over email, less than 10 percent of de
minimis packages enter the country by post, and the eventual working
out of the China ban on de minimis has led to a substantial drop in
this kind of package volume. It’s just one of life’s little
hassles, and an unnecessary one. For small entrepreneurs, even
short-term delays or cost spikes from shipping through more expensive
services could be fatal to their business.

You can make a case for stopping de minimis from countries that
exploit the loophole; I have done so
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You can make a good case for changing the exemption from $800, a level
Congress only set in 2016, to $100, as the administration has
effectively done. But you cannot make a case for doing any of this
before setting up the processes for how it will all work.

That’s ultimately the problem with Trump’s version of state-run
capitalism, even if you agree with the idea behind individual actions.
It’s all being done in such a shortsighted way, or for the purposes
of punishing enemies and rewarding friends, that there’s no way to
disaggregate the salutary policy in theory with the cock-up in
practice.

Take the Trump administration’s acquisition of a 10 percent stake in
Intel
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which no less than Bernie Sanders has endorsed
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“If microchip companies make a profit from the generous grants they
receive from the federal government, the taxpayers of America have a
right to a reasonable return on that investment,” Sanders said, a
consistent stance for him dating back to the debate over the CHIPS
Act.

But the Trump administration isn’t giving Intel a generous grant;
that money was already out the door before Trump took office. Trump
claimed that Intel’s CEO was a Chinese operative and demanded that
he resign, following which, or in mitigation for which, he grabbed the
10 percent stake. The implication is clear: Trump wanted a
payoff—protection money, really—or he would hurt the company. That
is far different than seeking equity in exchange for federal support.

Intel now must issue more stock to accommodate the giveaway, which
will make it marginally more difficult to raise new capital.
Meanwhile, the feds’ new stake gets the company no support to make
higher-end chips or acquire more customers. Nor are there any
governance changes on the horizon to fix a company that has been far
more concerned with its own stock price
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than engineering feats. Intel has maxed out shareholder payouts over
the past two decades, and has so little to offer that it had to
suspend dividends a year ago
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So Trump bought into a dying company with structural deficiencies.
Maybe in some way, the stake ensures that Intel’s foundries will
stay in business. But that’s just treading water. The whole problem
with the industry is that the playing field for a domestic chip
manufacturer relative to overseas competitors and fabless chip
designers is woefully uneven. And Trump is actually _exacerbating_
this disparity through his other deals.

Trump allowed Nvidia to sell chip designs to China for a dubious 15
percent export fee, and waved in Apple’s overseas chips after
getting a gold-and-glass statue from its CEO. These deals directly
undermine the company whose stock Trump just seized. And the sunk cost
of buying the stake will only heighten this contradictory position.

There are other examples of Trump taking a minority stake that has
jump-started the business, as with rare-earth producer MP Materials
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which now has a $500 million contract with Apple. But Intel’s
problems go far deeper than a nascent rare-earth company, and a major
investor like Trump is likely to gauge the stock price instead of
performance as a metric of success, pushing for a return in exactly
the ways that got Intel into trouble in the first place.

In some primitive sense, it might be good to get equity stakes in
exchange for government support. In reality, a far more coordinated
effort would be needed to actually preserve that investment and
Intel’s place in the semiconductor industry, much less enhance them.
There’s more to market-crafting
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than taking on stock, especially stock in a failing company. But
that’s the primary way Trump conceives of it
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And it’s the same across the board. Equity interest in defense
manufacturers
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like Lockheed Martin that are already effectively wards of the state
may sound appealing. But do we really want to take the notional
influence Lockheed has on U.S. foreign policy and make it more
institutionally cemented with an equity stake? Should what’s good
for Lockheed literally be what’s good for the country?

There are times when tariffs can be employed to good ends to boost
domestic manufacturing. Blanket tariffs on all goods, including ones
that can’t be produced in the United States, and on components for
domestic manufacturing, are just stupid, as is the whipsawing of
tariffs from one level to another so nobody can plan or invest. And
predictably, U.S. manufacturing output is collapsing
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outside of data centers, new orders are down
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stagflation with higher inflation and higher unemployment is starting
to bite, and “recession specials
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are popping up around the country.

You can sit around and debate theories about state capitalism and
optimal concepts for government’s relationship to business. I first
heard about government equity stakes as a more efficient means for
corporate taxation from Dean Baker years ago
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If you subscribe to the theory that taxation is a public seizure of
private resources, then an equity stake is no different than the
corporate tax [[link removed]],
and by the same token regulation is no different than corporate
governance. And you can say that the last interventionist effort in
the economy by Joe Biden was too reliant on corporate whims
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should have leaned on more public ownership of infrastructure in
industries like energy.

I’m here to say that none of this theorizing matters right now,
relative to the specific circumstances. We don’t have fantasy world
industrial policy but the actually existing position of Donald Trump
dictating the economy from on high, devoid of any strategy outside of
the two inches between Trump’s face and whatever CEO is sitting in
the Oval Office. It’s frequently slapdash and contradictory, and it
is on a trajectory to make the entire country poorer. Just because it
occasionally rhymes with decent policy doesn’t make it supportable.

_David Dayen is the Prospect’s executive editor. His work has
appeared in The Intercept, The New Republic, HuffPost, The Washington
Post, the Los Angeles Times, and more. His most recent book is
‘Monopolized: Life in the Age of Corporate Power.’_

_The American Prospect is devoted to promoting informed discussion on
public policy from a progressive perspective. In print and online, the
Prospect brings a narrative, journalistic approach to complex issues,
addressing the policy alternatives and the politics necessary to
create good legislation. We help to dispel myths, challenge
conventional wisdom, and expand the dialogue._

_American Prospect, Inc., is a 501(c)(3) nonprofit corporation
headquartered in Washington, D.C. You can support our mission with a
subscription or a tax-deductible donation._

* Trump economy
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* Tariffs
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* Intel
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* Equity interest
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* China
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