Our Canadian Goose is actually American this week, and belongs right here at the top. A funny thing happened a few days ago when an obscure social media account called The Cincinnati News tweeted the following:
US-owned steel plant with a plant in Middletown OH begins mass layoffs amid Trump tariffs: In a memo sent by Cleveland-Cliffs to workers, the company explicitly linked the move to Trump’s steel tariffs on Canada, which it said had “significantly shrunk the market” for its products.
The story it linked to was from Newsweek, and carried the headline, “US-owned Canadian steel plants begin mass layoffs amid Trump tariffs.”
As the careful readers you are, you may have noticed from the headline that it is the Canadian plants laying off workers. In fact, the very same company slowing work in Canada had recently announced a $1 billion investment to expand capacity at its Middletown, Ohio plant. The tweet gets this sufficiently mangled that an unsuspecting, ideologically driven pundit might read it and think the story was a chance to dunk on tariffs, when in fact it is a story about tariffs working the way they are supposed to. It almost seems like a clever ploy by someone who wanted to highlight a tariff success and expose the shallowness of the opposition…
Well, friends, The Dispatch’s Jonah Goldberg is not such a careful reader. He eagerly hammered his “retweet” button for the story, adding the incisive commentary: “Maybe the tariffs were stupid all along?” Oops. Marc Short, chairman of Mike Pence’s Advancing American Freedom, went with, “Battleground states throughout the heartland feeling the pain of irrational trade policy.”
As men of strong intellectual integrity, I presume both will maintain their commitment to this story as an important one worth highlighting, and using to draw conclusions about the effectiveness of tariffs. At the time of this writing, they have not yet corrected the record and acknowledged the positive result, but that will surely come soon.
Bonus Gosling of the Week: Radio host Erick Erickson showed impressive followership in retweeting both the original story and the Goldberg dunk off the back rim.
GOOD READS FOR YOUR WEEKEND
What a Year of Free Money Meant: Softer Diapers, Clean Laundry, a Visit to Six Flags (New York Times). Yes, basic income experiments consistently fail, public opinion is strongly against, and even past advocates are acknowledging it’s a bad idea. But hey, there’s always money for more basic income experiments. Here, the Times profiles three recipients of a one-year experiment in California. As I wrote long ago, a time-limited experiment says nothing about the long-term effects of a permanent entitlement. The experimenters and journalists continue to struggle with this concept, but it was good to see that one of the three profiled recipients understood intuitively: “One year of payments was ‘just enough time not to get comfortable,’ she said, and the urgency motivated her.”
Silicon Valley’s Dream City Has Crashed Into Small-Town Politics (Wall Street Journal). I’m not one to take the side of wealthy venture capitalists trying to buy their way out of the ordinary democratic process but, I have to be honest, this story makes a pretty strong case that the local political process deserves whatever it gets.
The Welfare State Is Crushing Britain (Wall Street Journal). The UK is in trouble.
What Evangelicals Can Teach Us About Organizing (Eric Blanc, Labor Politics). A really great look at what it takes to build community in modern America, and what institutions associated with opposite sides of the political spectrum have in common and can learn from one another.
TAXES & TARIFFS
Kim Clausing and I disagree on tariffs and have enjoyed debating each other a number of times, but we agree on this: There is a smarter way to tax the rich (Financial Times). Tax capital, folks. This statistic, especially, fascinated me: “Despite having the world’s most successful public companies, the US raises much less from corporate tax (about 2 per cent of GDP less) than other rich countries.”
Arnold Ventures chairman John Arnold makes a strong case that, as a matter of fiscal policy, tariffs are here to stay and businesses should plan accordingly: “Status quo is the strongest force in politics. My expectation is that, despite all the handwringing, the eventual tariff regime will look similar to today’s. That is a 10-15% baseline tariff on most imports, higher rates on countries with blatantly unfair trade practices and/or geopolitical rivals, and industry specific adders on those deemed strategic to national security or economic interests.Most businesses prioritize certainty so they can make investment decisions, forecast expenses, and have confidence in supply chains. That certainty is probably more important than the rates.”
Also on X, Michael Lucci makes a similar point: “Trump’s Transatlantic and trade policies are here to stay.”
I’d suggest this is right for three reasons: First, we need the revenue. Second, tariffs create pro-tariff constituencies that will fight to keep them. Third, the tariff deals that Trump has struck are, by all accounts, advantageous to the United States. Ripping them up out of spite, or on principle, will be difficult to defend.
WOMP WOMP
Marshall Cohen (CNN): “New Reuters poll is brutal for prediction markets.” Score another one for the common sense of the American people, who by a 75% to 8% margin say prediction sites are gambling.
The White House may be staying away, but The FTC Is Beginning to Probe the Sports Gambling Industry (The Washington Sun).
And it turns out common-law liability can work. Buried under lawsuits, Character.ai Files For Bankruptcy—Disney Bids $20 Million After Copyright Dispute (Forbes).
A SURPRISING PRO-FINANCIALIZATION MOMENT
Bloomberg reports: KKR Bans Non-Competes for Lower-Paid US Portfolio Company Staff. Good for them!
Ok, enough of that. Back to our ridiculous story from the world of finance: To Get This Job at McKinsey, You’ll Need to Survive a Debate With AI First (Wall Street Journal):
Though it is all a simulation, the approximately 10-minute conversation with the AI will take place in McKinsey’s very real offices, with partners or interview assessors in the room observing how the candidates do.
…
“The things I’m paying attention to are: Hey, did you hear what they said that was important? Did you act on that? Did you blow through it? Did you come with your agenda and you’re, like, ‘I’m gonna steamroll this answer,’” Zafar said. “What we’re looking for is how do you respond to changing stimuli?”
McKinsey is testing the avatar with undergraduates applying for business-analyst jobs in some North American offices this fall, and hundreds of candidates are likely to participate. If successful, the firm expects to use it for other roles next year.
To clarify, McKinsey is not “testing the avatar with undergraduates,” it is testing the avatar on undergraduates. There’s a difference. This also seems to be one of the most painfully unnecessary overuses of AI out there. One can picture the meeting where the recruiting team assigned to incorporate AI had to come up with it. Just going out on a limb, but maybe the human interviewer could assess “how do you respond to changing stimuli?” through actual human interaction with the human candidate?
THE OVERCAPACITY STORY EXPLODES
China’s trade surplus this past month went entirely out of control. China’s Exports Soar, Putting Its Trade Surplus on Track for a Record, reports the New York Times, noting that “China’s exports grew last month at the fastest pace in almost any month since the end of the global financial crisis.”
What did this mean for Europe? The South China Morning Post’s Finbarr Bermingham had the numbers: “China’s trade surplus with Germany grew 201.7% in Sept alone (vs Sept 2025); with EU up 52.3%; with France up 251.8%.”
And the Europeans are finally getting serious! More from Bermingham:
EU leaders to ‘urgently’ call for new trade weapons to tackle China shock.
After hybrid car deal, EU needs to rebalance China trade in other sectors, Dombrovskis says.
“A deal halving Chinese hybrid car imports into Europe will have to be followed by the rebalancing of trade in other sectors and better access to the Chinese market for the EU, European Economic Commissioner Valdis Dombrovskis said on Wednesday.”
And then looking back on the week: “Unanimity in the room that the EU needs to cap Chinese exports across sectors and president of the European Commission presenting a kill switch to instantly cut China from the market that capitals love. Through the looking glass moment for those who have followed this stuff for years. Actions speak louder than words, but I am pretty amazed by how quickly the mood has changed. Largely driven by a shift in Berlin. Many thought for years that nothing would change unless Germany changed. Well, here we are…”
The Brookings Institution’s Robin Brooks shows how this looks on the Chinese side in How China Is Reinventing Its Export Machine, with great charts on how China’s imbalances with other countries are exploding.
Not all other countries, though. There’s this one country that decided enormous imbalances were unhealthy and unsustainable and took action. In that country, the imbalance with China has declined. Hey, that’s us (good chart)! And it’s a reminder that the counterfactual without Trump’s trade policy is not business as usual but the same kind of sharper pain being felt elsewhere. That we have not only held the line but actually made progress is remarkable.
MORE CHIPS, PLEASE
Semiconductor fabs lead the reindustrialization story this week.
Japan to fund $21B deal to expand chip production in New York (The Hill)
TSMC Weighs Texas Expansion, Holds Talks on Musk’s Terafab (Wall Street Journal)
Which brings us to your regular reminder that none of this would be happening without the aggressive industrial policy adopted to drive domestic investment in chip production, which is now compounding on itself.
But this isn’t good: ASML’s chip equipment sales to China soar 109% despite US export curb push (SCMP). “The Dutch firm expects China to account for 20 per cent of its total sales this year, even as the U.S. pushes for tighter export restrictions.” The U.S. is right to push for tighter export restrictions, but it’s hard to make that sale to allies when our own government is trying to sell our best chip technology to China at the same time. Which is why the export controls in the NDAA are so important. American Compass’s Chris Griswold published a very good policy brief on that yesterday: Strengthening America’s AI Chip Export Controls.
OK, OK, YOUR WEEKLY CANADA GOOSE
Congratulations to Canada on “Geely Auto Group Mainstream Brand Officially Announces Entry into the Canadian Market.” Probably puts their associate EU membership at risk, but worth it for a closer strategic partnership with China.
Speaking of which, this is fascinating: China’s Unloading of US Bonds Gets Fresh Look as Skeptics Grow (Bloomberg). It seems China may not have been reducing its holdings of U.S. Treasuries, instead just parking them at Canadian banks where they get recorded as Canadian holdings:
Puzzled, Liberman — a mortgage-debt specialist — started asking around. The answer, to his surprise, was always the same. “The smartest people on the Street said, ‘It’s not Canada. It’s the other Canada,’” he said. And by “the other Canada,” he explained, “they meant China.”
“China, the Other Canada.” This seems unwise. I do hope the Canadians reconsider.
Enjoy the weekend!
The Other Canada seems to be more at risk than The Physical Canada but a pox on both their houses.
I am well past this stage of life but I think I would rather be interviewed by AI than some woke girl boss from HR.
You know it's another dismal week for DonOrenomics when the lead story is another slappy fight over minutiae with the long-ago excommunicated "old" right. It's so interesting that as the election approaches, Don and Oren aren't touting the supposed economic nirvana spawned by their major policy intitiatives-taco tariffs, the BBB, record-setting deficit spending, and their Middle East war. Instead, Oren ruminates on the irrelevant tweets of fellow think tank elites, while Don babbles about trans kids in faraway places, oh so scary brown people coming to get us, and how D's are marxists/communists/socialists/whatever.
One would think, after over a decade dominating both their party and our politics more generally, Don and Oren's "new" right might have something serious to say. Why exactly does the "old" right, the people kicked out of the party long ago, people with no political power, matter?
In the words of our sophomoric Secretary of WAR, how low T...