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    Home»Market News»Global Economy Insights»Tariffs, AI, and the Golden Age of Executive Power
    Global Economy Insights

    Tariffs, AI, and the Golden Age of Executive Power

    kumbhorgBy kumbhorgJanuary 13, 2026No Comments7 Mins Read
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    Tariffs, AI, and the Golden Age of Executive Power
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    One year ago, Donald Trump took office, swearing an oath to “preserve, protect, and defend the Constitution of the United States.” Americans were promised a new golden age, one in which the nation would flourish, in Trump’s words: “We will be the envy of every nation and we will not allow ourselves to be taken advantage of any longer.” One year into this so-called golden age, a familiar pattern has emerged. 

    Internationally, the administration has erected tariffs in the name of reviving manufacturing. Domestically, it has implemented sweeping national policies to govern emerging technologies such as artificial intelligence. These are two sides of the same coin: executive power extending into domains traditionally disciplined by Congress and the states. These developments raise a central question: is the pursuit of national renewal reinforcing the constitutional and economic foundations of the republic, or quietly eroding them? 

    Tariffs and Manufacturing

    On April 2, or “Liberation Day,” tariffs captured much of 2025 as the administration sought to upend decades-long trading practices under the promise of bringing manufacturing back to the United States. In a return to an old-school mercantilist instinct, broad tariffs were imposed on imports to leverage the size of the U.S. economy against trading partners and supposedly spark domestic production, especially in nostalgic sectors such as steel and autos. 

    According to FRED, both domestic auto production and employment in manufacturing continue to decrease. At the same time, prices have risen sharply over the past year. From March to September of last year, the Producer Price Index (PPI) for Metals and Metal Products rose roughly by 10 points, from 132 to 143. In autos, Fitch Ratings places the 60-plus-day auto-loan delinquency rate at a record high, with new car prices averaging more than $50,000 for the first time. 

    Taken together, tariffs have taxed consumers while failing to deliver the promised production gains — manufacturing, in effect, a kind of policy-made madness. In addition, affordability is now casting a long shadow over the economy, especially when tariffs are applied to goods the United States has little or no capacity to produce at scale, such as bananas and coffee, revealing the bluntness of broad-based tariff policy and a poor understanding of America’s own production capacities.

    The idea that tariffs can serve as a magic wand to revive industry rests on a false premise of government action in the economy. Governments do not trade and create prosperity. Firms and individuals do, as they truck, barter, and exchange their way toward a better future.

    Artificial Intelligence National Policy

    On December 11, 2025, Donald Trump set into motion a National Policy Framework for Artificial Intelligence. This Executive Order is designed to preempt state law: “My Administration must act with the Congress to ensure that there is a minimally burdensome national standard — not 50 discordant state laws. The resulting framework must forbid State laws that conflict with the policy set forth in this order.”

    “Defending the Constitution” must mean something different in Washington, because the Tenth Amendment speaks exactly against this sort of power concentration. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” 

    Consolidating rules under one roof in this manner reflects poorly on the constitutional design in which each state has room to craft laws for its own people. How else can competing ideas be tried and tested if all states operate under a single federal banner? In other words, these blanket rules reduce the space for experimentation and creative destruction while concentrating power in firms such as: Microsoft, Alphabet, and OpenAI, companies that can retain large legal teams to navigate such federal laws.

    Moreover, the “minimally burdensome national standard” comes equipped with an AI Litigation Task Force designed to pressure states into conformity with the new federal framework. “The Attorney General shall establish an AI Litigation Task Force (Task Force) whose sole responsibility shall be to challenge State AI laws inconsistent with the policy set forth in section two of this order, including on grounds that such laws unconstitutionally regulate interstate commerce.” In an effort to combat bureaucracy at the state level, the response is a new federal bureaucracy to police the states under a single policy.

    An Executive Unchecked

    Like Order 66, Executive Orders 14257 on tariffs and 14179 on AI policy reflect the modern temptation to treat governance as command rather than consent. When the executive frames trade deficits or emerging technologies as emergencies that demand immediate action, policy is issued from the center and enforced through agencies and litigation rather than deliberated through Congress and tested through federalism. The result is not merely bad policy in tariffs or AI; it is a constitutional shift. Each precedent for unilateral action becomes a template for the next, producing regulatory whiplash; one president governs by decree, the next reverses by Autopen, and eroding the stability that firms, households, and states require to plan. Over time, the republic begins to function less like a system of separated powers and more like an administrative chain of command. It is therefore no wonder that trust in government, according to Pew Research, has sunk to historic lows: “Just 17 percent of Americans now say they trust the government in Washington to do what is right ‘just about always’ (2 percent) or ‘most of the time’ (15 percent).”

    James Madison, Father of the Constitution, anticipated this entire problem. In Federalist No. 10, he warned that “enlightened statesmen will not always be at the helm,” which is precisely why a free society cannot rely on the character or self-restraint of any single officeholder. The constitutional design assumes that emergencies will be invoked, passions will flare, and interests will press for advantage. The remedy is not to hope for better rulers, but to preserve the institutions that force restraint and distribute power. When emergency governance becomes routine, the public is asked to substitute trust in process with trust in personalities. A republic cannot remain stable on those terms.

    A practical way to begin breaking this executive ratchet is to restore Congress as a genuine counterweight, and that requires rebuilding its federalist character. The Senate was originally intended to represent state governments as political units, not simply to mirror national party coalitions. The Seventeenth Amendment’s shift in 1912 to direct election, instead of election by state governments, altered senators’ incentives entirely. Direct election may be democratic, however it weakens the Senate’s original function as an institutional representative of state governments, thereby weakening federalism as a check on executive power. Instead of being accountable primarily to state legislatures and state institutional interests, they increasingly respond to national party lines and Washington’s internal logic. Repealing that amendment, so senators are once again anchored to state interests, would strengthen oversight of the executive, improve the representation of states within Congress, and rebalance authority between the states and the federal government. In one swift motion, both the federal government and the executive branch would be restrained while providing an incentive for people to care about state government affairs. 

    If America wants a genuine golden age, it will not be issued by Executive Order, it will be rebuilt by restoring the limits that make self-government possible.

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