{"id":545535,"date":"2026-03-18T23:29:12","date_gmt":"2026-03-18T23:29:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/545535\/"},"modified":"2026-03-18T23:29:12","modified_gmt":"2026-03-18T23:29:12","slug":"trumps-embrace-of-ai-is-blowing-up-the-whole-reason-he-wanted-tariffs-in-the-first-place","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/545535\/","title":{"rendered":"Trump’s Embrace of AI Is Blowing Up the Whole Reason He Wanted Tariffs in the First Place"},"content":{"rendered":"

Donald Trump has created something of an economic catch-22 for himself. On one hand, he desperately wants to bring down trade deficits by hitting trade partners with punishing tariffs to encourage domestic production. On the other hand, one of the only things currently keeping his tanking economy afloat is the booming AI industry, and it is importing so much that it\u2019s ballooning the trade deficits to record highs, according to the New York Times<\/a>. What\u2019s a president to do?<\/p>\n

When Trump introduced his \u201creciprocal tariffs\u201d last year, which have since been deemed unconstitutional<\/a> by the Supreme Court, the plan was to reduce trade deficits. The reason for that goal seems to stem from a fundamental misunderstanding of what trade deficits are\u2014Trump seems to believe they are a debt<\/a> rather than simply an indication that the country imports more than it exports. But even ignoring the apparent economic illiteracy, the goal of increasing domestic manufacturing and production is valid enough.<\/p>\n

Except the tariffs haven\u2019t achieved that goal. In fact, things have gotten worse. Last month, the Wall Street Journal reported<\/a> that manufacturing construction spending has fallen every month since Trump took office. Likewise, factory activity has been almost exclusively in a downward trajectory. The United States\u2019 gross domestic product shrank for the first time since 2022<\/a> shortly after Trump introduced his tariffs.\u00a0Growth<\/a>\u00a0has been significantly slower than predicted<\/a>, and jobs are disappearing<\/a> rather than cropping up from expanded domestic production.<\/p>\n

One of the few industries that is still growing in the booming AI business. And sure, it might just be a handful of companies moving money around until the shell game finally comes crashing down, but lots of money is flowing in to bet on that game. JPMorgan estimated<\/a> that AI-related capital spending outpaced consumer spending as a factor for economic growth in 2025, and spending on AI initiatives is projected to skyrocket to over $700 billion<\/a> in 2026. At this point, Trump needs the industry to keep pumping its numbers to keep the rest of the economic indicators out of the red<\/a>.<\/p>\n

The problem for the president is that AI\u2019s buildout is driving up his derided trade deficits. Per the New York Times, the United States imported more than $450 billion worth of computers, computer accessories, and semiconductors in 2025, a 60% increase from last year. It\u2019s a large reason that the country\u2019s overall trade deficit has climbed to over $1.2 trillion in 2025\u2014a new record level of imbalance.<\/p>\n

Ironically, one of the few things that caused a spike in US manufacturing that has otherwise been in a freefall for decades was the introduction of the CHIPS Act<\/a>, signed into law by President Joe Biden and meant to encourage domestic production of semiconductors\u2014one of the things driving up the trade deficit, as companies rely on factories in Taiwan to keep up with their needs. Trump has called on Congress to kill that law<\/a>, despite the fact that it\u2019d basically kill two birds with one stone, given his current predicament. Turns out the only thing he hates more than trade deficits is someone else fixing it for him.<\/p>\n","protected":false},"excerpt":{"rendered":"Donald Trump has created something of an economic catch-22 for himself. On one hand, he desperately wants to…\n","protected":false},"author":2,"featured_media":545536,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[276,45,49,48,46,4992,1689,7456],"class_list":["post-545535","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-artificial-intelligence","tag-business","tag-ca","tag-canada","tag-economy","tag-tariffs","tag-trade-war","tag-trump-administration"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/545535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=545535"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/545535\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/545536"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=545535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=545535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=545535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}