President Trump has long promised tariffs, and now they’re here. In our book, this week’s actions were a clear “known known” and should not have taken anyone by surprise.
But whether you love tariffs or hate them, they will not operate in a vacuum as the Administration works towards its stated goal of rebuilding America’s industrial base and maintaining our technological edge. It is essential that policymakers in the White House and on Capitol Hill also create the right tax and regulatory environment to bolster this new economic framework.
For one, that means keeping taxes low–not raising them on individuals, investments, and businesses, as recent reports have suggested are currently under discussion for the upcoming reconciliation package.
Likewise, it means rolling back regulations that make it harder to build in America and harder to sell American goods to the world. On that front, there is perhaps no rule as counterproductive as the Biden-era AI diffusion rule, restricting one of America’s most competitive export sectors—advanced AI chips—at precisely the wrong time.
Rather than boosting our position, this rule slows down the very export growth we need. With global AI infrastructure spending projected to hit $1 trillion by 2026, U.S. chip dominance is arguably our single biggest advantage in closing trade deficits.
Yet just as our trading partners are being pressured to open their markets to American goods, we’re simultaneously tying our own hands in the sector where we presently have a clear lead and where other countries are actively seeking out our technology. Meanwhile, DeepSeek’s recent breakthrough on Huawei chips proves the rule’s fatal flaw: it doesn’t stop foreign AI progress. It merely gives companies like the CCP-controlled Huawei an open lane to seize crucial market share in our absence.
If we’re serious about fixing global trade imbalances, revoking the AI diffusion rule is the next logical move. Otherwise, we’re just making things harder on ourselves and weakening our strongest export for no good reason.
