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To: Bill Wolf who wrote (195350)	8/23/2025 9:51:13 AM
From: Bill Wolf	2 Recommendations Recommended By Jim Mullens sbfm Respond to of 197001

More OT: Tariffs Won’t Break the Economy. Corporate Shakedowns Might. By Amar Bhidé Aug 22, 2025, 4:00 am EDT About the author: Amar Bhidé is the author of Uncertainty and Enterprise. He is a professor of health policy at Columbia University and professor of international business emeritus at Tufts University. A broad consensus among economists has warned of the dire consequences of tariffs since Trump issued his first salvo in January. Yet, even with tariffs now close to the much-feared Smoot-Hawley rates of the 1930s, the U.S. economy is still far from collapse. Growth and job creation continue, if slowly, and the stock market is hitting new highs. What gives? Were economic gurus right but early, and the stock market myopically complacent? Or are Trump’s trade warriors right on tariffs? In fact, both the president’s friends and foes exaggerate the economic significance of his tariff decrees and in doing so risk drawing attention from graver, but less obvious, threats. These risks aren’t immediate or even mainly about trade. They arise from ad-hoc arm-twisting and blustery dealmaking that threatens the country’s dynamism and its rule of law. What are the trade warriors missing? For starters, market-determined exchange rates, which no one can control or predict, play material roles in determining the prices of imports. The dollar has declined nearly 10% this year. Another 10% fall would take the dollar back to its level in May 2021. Such devaluations have practically the same effect as tariffs: They make imports more costly. Cross-border trade plays a modest role in the large, diversified U.S. economy. Exports and imports amounted to about 5% of gross domestic product for much of the nation’s history. More impactful are domestic tax, spending, and labor policies—factors affecting internal trade, in other words. Biden-era inflation was driven by legislation that authorized eye-popping spending that couldn’t be met by domestic demand, helped along by a careless Federal Reserve. Similarly, a collapse in domestic housing and mortgage markets triggered the 2008 financial crisis. Popular mythology aside, the much-reviled Smoot-Hawley legislation couldn’t have produced the cataclysmic collapse in domestic demand during the Great Depression. It raised the tariff on dutiable imports—then amounting to just 1.4% of GDP—from 40% to 47% Imports from low-wage countries have played a negligible role in the multicentury decline in manufacturing’s share of U.S. jobs. At no point in the country’s transformation from an agrarian economy in the 1800s to its current form did manufacturing employment ever exceed services, as the economic historian Angus Maddison showed. In 1950, even as the manufacturing sector was in full swing, it accounted for only about a third of total employment. Services had a 53% share of employment. Today, there are more than 10 times as many service jobs than manufacturing jobs. Domestic policy will make or break Trump’s radical agenda. Unshackling domestic enterprise could deliver the unprecedented wealth that the president predicts his trade victories will produce. Conversely, beware if the law’s multitrillion dollar price tag provokes a bond buyer’s strike. But that isn’t to say the president’s trade war theatrics are a sideshow or a problem just for hapless Bangladeshi or Sri Lankan garment workers. It may amuse jingoists to see foreign governments and leaders humiliated, but the concurrent shakedown of U.S. companies and executives is no joke. U.S. dynamism relies on the enterprise of major corporations. Pressuring Apple to invest $100 billion in facilities in return for an exemption from a 100% tariff on high-end computer chips epitomizes the centralized heavy-handedness that stifles large European and Japanese companies. So does the deal squeezed out of Nvidia for 15% of its chip sales to China. The president’s ad-hoc corporate shakedowns undermine the country’s constitutional architecture. The Constitution doesn’t expect government by and for angels: Framer James Madison foresaw that “the landed and manufacturing classes” would promote different tariff policies—without “regard to justice and the public good.” But without other sources of revenue, tariffs were unavoidable. From the 1790s to 1860, tariffs accounted for 90% of the federal government’s revenue. The founders didn’t try to suppress special interest politicking. Instead, they designed a messy but effective antidote that separated Congress’s power to enact laws from the president’s responsibility to implement them. Fiercely contested legislation delivered predictable, if high, tariffs, and then a transition to revenue raised through income taxes in the early 20th century. But over time, imperious presidents from both sides have undermined respect for enacted laws. Executive decrees that subvert legislation and ignore supine lawmakers have proliferated. At his current rate, Trump will sign more executive orders in the first year of this term than President Barack Obama signed in his eight years in office. Trump has dared judges to overturn the “emergency” tariff decrees he is using to coerce U.S. businesses and foreign governments. Any tax or tariff is theoretically distortionary. Yet taxes are the price we pay for a civilized society, as Supreme Court Justice Oliver Wendell Holmes put it. Likewise, messy Congressional compromises over taxes, tariffs, and lawmaking are the price of avoiding despotism. Partisans who cheer “their” president for brushing aside legal niceties fire up the other side to later do worse. Guest commentaries like this one are written by authors outside the Barron’s newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to ideas@barrons.com barrons.com .

To: Bill Wolf who wrote (195350)	8/26/2025 9:08:11 AM
From: Bill Wolf	2 Recommendations Recommended By JeffreyHF sbfm Respond to of 197001

Intel’s Trump Deal Is Just 1 More Reason to Sell, Analyst Says By Martin Baccardax Aug 25, 2025, 4:08 pm EDT Former President Ronald Reagan once famously described the nine most terrifying words in the English language as: “I’m from the government, and I’m here to help.” Intel CEO Lip-Bu Tan might be included to agree. Having been summoned to the White House earlier this month following an accusation from Sen. Tom Cotton that tied him to state-owned business in China, Tan has wound up having ceded nearly 10% of the chip maker to the U.S. government. President Donald Trump was in a mood to celebrate, saying he “paid nothing” for the shares and promising the stake would be “a great deal for America and, also, a great deal for Intel.” Although the stock has risen, not many analysts seem to agree it will help for long. Jay Goldberg, a senior analyst at Seaport Research Partners, thinks the deal, which converts around $9 billion in funds earmarked under President Joe Biden’s Chips and Science Act program into a 9% equity stake, still leaves Intel with a host of challenges. He rates Intel stock at Sell, with a target of $18 for the price, some 27% below where the shares closed on Friday. “The stake in Intel does nothing to shore up the company’s funding needs, except for the possible signal it sends to commercial entities to follow suit and actually invest in the company,” he said in a note published Monday. Goldberg thinks Intel needs at least another $20 billion to shore up its 14A process, a next-generation technology that it hopes will justify its chip-manufacturing expansion. Without that cash, he argues, “the company’s future in semis manufacturing essentially comes to an end.” He also points to a number of questions, most of which remain unanswered, in the unorthodox arrangement. “There is no clear legal mechanism for this exchange, and so could theoretically require congressional approval,” he said. “The government is not pledging to support Intel in any other way [beyond unlocking the Chips Act money] and governance remains highly uncertain” now that the president has said he “controls” Intel. All that said, Intel stock has risen more than 18% since Tan met with Trump at the White House on Aug. 11. It has gained nearly 24% since the start of the month. But Intel also told investors, through a Securities and Exchange Commission filing published Monday, that the new stake will dilute existing shareholders. If the government also converts the warrants it purchased, which are linked to the ownership of Intel’s foundry business, they could be diluted even more. Goldberg at Seaport Research thinks the most likely benefit from the stake is that it could encourage other companies to invest in Intel, with the aim of accelerating its domestic chip production, which has already been delayed to around 2031. But that, he argues, “leaves investors in a precarious limbo.” “On the one hand, news of outside investment will be seen as a strong positive for the stock,” he said. “But on the other hand, once the glow of those investments fade, the company’s commercial prospects remain highly challenged.” barrons.com