Trump’s mafioso export policy cripples his own success | Opinion
Donald Trump has lost the thread. If there are two economic policies that he is known for and that form the basis of the alliance between so many old Republicans and much of the new right, they are tax cuts and a mercantilist trade policy featuring an array of new tariffs intended to bolster our manufacturing base. Trump has always said you Make America Great Again by leveling the playing field between American companies and unleashing American capitalists to compete globally with exports.
That’s not my characterization of his policy; it is what the White House said on its website in the last week: “President Trump is ensuring that our trade policy works for the American economy, levels the playing field for American workers and producers, and strengthens America’s defense industrial base. … The largest tax cut in history” in the “One Big Beautiful Bill is fueling a renaissance in American business competitiveness.”
But last weekend, Trump repudiated both policies, and MAGA world barely noticed. You might not have noticed. The Trump administration announced a new deal with two U.S.-based artificial intelligence chip makers to pay a 15% export tax on their sales of certain AI chips to China.
Trump is punishing cutting-edge American leaders — Nvidia and Advanced Micro Devices — for exporting more to China and shrinking our deficit. He is making it more expensive for American companies to compete in selling their products overseas.
If a Democrat came up with that idea, the Trump who ran for president less than a year ago would have called them the enemies of the American worker and American business. That guy would have been right.
Moreover, Trump is stepping all over one of his big first-term successes. In 2020, while Joe Biden was running for president and attacking Trump’s economic policies, Taiwan Semiconductor — the contractor that makes the AI H20 chips for both Nvidea and AMD — announced a $12 billion investment in chip fabs to be built in America. The Phoenix, Arizona, plants with thousands of workers are churning out a growing share of those chips here instead of in Taiwan. Why on Earth would Trump repudiate that huge deal and punish the workers of America’s future?
He doesn’t have much of an explanation: “The H20 is obsolete,” Trump said on Monday of Nvidia’s AI chip. “So I said, ‘Listen, I want 20% if I’m going to approve this for you, for the country.”
That sounds more like a mafia boss looking for a taste than a president who should have been proud of a giant success for his economic policy that traditional conservatives like me and economists around the world incorrectly called foolish. He should be rubbing our faces in it. Every “obsolete” chip that leaves American shores and shrinks our trade deficit with China is evidence that the Donald might have a point. America First never looked better.
And the impact will be wider than just on chip makers. Now everyone thinking about making a multibillion-dollar investment in the United States and planning to hire and train thousands of Americans for good jobs has to think twice because Trump might demand a cut of the deal.
That could leave American workers making less than they could at export-related jobs. The Arizona plants that make AMD and Nvidea’s chips pay $45,000 a year to start and then two, three or even four times as much for higher-level jobs. Export jobs overall pay 15% more than the average in the U.S.
To make matters worse, a tax punishing exports is flatly unconstitutional, but the companies involved will never go to court because it is not unconstitutional for the administration to simply block the sales on national security grounds. That’s what Biden did.
This policy makes no sense, and the administration should reconsider it fast before Trump’s Tony Soprano turn does any more damage.
David Mastio is a national opinion columnist for McClatchy and the Kansas City Star.
This story was originally published August 12, 2025 at 2:52 PM with the headline "Trump’s mafioso export policy cripples his own success | Opinion."