The state-directed capitalism of President Biden’s subsidies and Mr. Trump’s tariffs might attract some investments and create hothouse jobs that require perpetual subsidies and protection, but they misallocate productive resources and make the nation poorer. Protectionism also raises consumer prices, dampens competition, and slows innovation and growth.
As Elon Musk has wisely suggested, Mr. Trump can still save us from this bleak future with real reciprocal trade agreements in which we and our trading partners mutually lower our trade barriers. The president’s advisers and Republicans in Congress would serve him better by remembering Thomas Sowell’s advice: “When you want to help people, you tell them the truth.”