Leibowitz on Trade: Structural gaps in US policy hold manufacturing back

As we close out 2025, my best wishes to all for a peaceful holiday season. Brighter days lie ahead.

This time of year gets me thinking about big things. Politics is the pursuit that drives us together as well as apart. It calls to mind a famous quote from a famous judge, Learned Hand (the most perfect name for a judge I ever heard): “Liberty lies in the rights of that man whose views you find most odious.”

The two parties are at each other’s throats. It’s not attractive, but we take the world as we find it. Democrats are struggling to seize the initiative in 2026. Republicans want to keep what they won a year ago. Neither has developed a workable plan as yet.

In politics, we not only need principles but also plans of action. I think it’s better to support policies that spur economic growth. If growth results, government can then regulate to soften the resulting harm or inequality.

That works better than regulating in a way that stifles growth. When it comes to policymaking, “An ounce of prevention is worth a pound of cure” usually doesn’t work well. Democrats don’t seem to understand this, while Republicans do. That is a big reason for Republicans’ electoral success in recent years.

A recent column in the New York Times by Matthew Yglesias takes up this point. He urges Democrats to embrace the fossil fuels industry rather than trying to eliminate it. That is a controversial stand, and I admire him for it.

Increasingly, politics focuses on issues that distract from the thing that makes America a world leader: private enterprise and the people who make it work, from the janitor to the scientist to the CEO. Our country prospers because of the work of everyone in it.

The government can help deliver prosperity. I am not against all government intervention in business. Most importantly, government must help businesses flourish in industries that are important to national defense and global prosperity.

Capital equipment for power plants and transmission lines, energy production, fostering cleaner energy, more efficient transmission of oil, natural gas, and other fuels are examples of what is necessary. Red states like Texas, Kansas, and Alaska would appreciate it. And consumers in blue states like New York and Massachusetts would too.

Democrats focus on inequities in our country, and we all need to think about ways to support people who need a hand. Immigration is a vital necessity for this country, which has always needed them and continues to do so. But it needs some measure of control.

The steel and aluminum industry, as well as downstream industries that purchase and fabricate those metals would benefit too.

Government initiatives in this area are mired in controversy, which is not a surprise. Just last week, the House of Representatives passed the “SPEED Act,” which is aimed at fostering new investment by dealing with delays from environmental and regulatory reviews. Pundits blame the National Environmental Policy Act (NEPA) and related statutes for these delays. They have a point: the environment is important, but other things are important too—such as modernization and global competitiveness. Currently, there is an imbalance.

Permitting reform, health care, appropriations, and many other issues fester because the country is so closely divided ideologically. This month, the Democrats are scoring some points, but on issues that seem not to be vital to our prosperity: the Epstein files, President Trump’s indelicate remarks about tragedies like the deaths of Rob Reiner and his wife, etc. Both parties persist in painting their adversaries as unacceptable people to vote for.

All this got me thinking about what the country should focus on for the future. Our problems are many and varied, and solutions always have consequences that we cannot foresee. Our global standing has suffered, not just from actions that offend some people but also because we are not leading in the things that made us great (economic wealth through private enterprise, for example), while others (China, Russia) are challenging American leadership. If we don’t respond now, we will have to do so later—when the world is in crisis and our options are few.

I look at the steel industry as an example worth studying. For decades, domestic producers have been eager to blame foreign companies that don’t play by the rules—but there is clearly more to it than that.

After World War II, the US produced half the world’s steel. That could not last, because much of the world’s production was blown to smithereens between 1939 and 1945. But through the 1950s and 1960s, steel stood pat and actually fostered foreign producers with strikes. (A huge one in 1959 led to a surge in imports because most of the US industry was shuttered).

In the three decades from 1960-1990, steel sought and received government support in the form of steel quotas and other measures, none of which slowed down the development of the steel industries in other countries. Now, tariffs have damaged steel-using manufacturers in the United States. But they have not slowed down steel in other countries. Advocates for steel protection in the United States actually maintain that tariffs imposed by the United States will help reduce overproduction in China! Absolutely not—won’t happen.

The tariffs will enrich US-based steel producers (including Nippon Steel, which became a domestic producer just this year). But those tariffs will not enlarge or modernize the domestic steel industry. More targeted government action is needed, action that encourages the production of steel vital to national defense as well as downstream manufacturing that employs many times the workers in steel production.

I have thought a lot about what would create a better market for industries that use steel in manufacturing. That should be the subject of discussion in Washington, Atlanta, and around the world. We can’t afford to keep spinning our wheels.