Credit Where Due?

I have mixed feelings about Cato. I did some work with them on Space Force and probably would have done more had Russia’s invasion of Ukraine not interfered. I disagree bitterly with their editorial line on Ukraine but was more sympathetic on Iraq. With regards to domestic policy (other than some civil liberties stuff) I generally find them abhorrent. But unlike other libertarian institutions Cato has been not at all shy about coming after Trump hard:

By June 1, previously limited 25% tariffs on steel and 10% on aluminum had spread to include Canada, Mexico, and the EU. By July 6, a first phase of USTR tariffs on $34 billion of imports from China went into effect, with another $15 billion added on August 23. A Peterson Institute study found, “the new $50 billion list targets even more intermediate inputs—95 percent of the products hit are now intermediate inputs or capital equipment used largely by American-based companies dependent on imports from China.”

Figure 1 shows that year-to-year growth in manufacturing output fell steadily after September 2018 and was down nearly 4% by October 2019. Manufacturing employment began falling continually after August 2018, long before the COVID-19 scare of March 2020.

In 2018, President Trump first began raising tariffs only on a small number of specific goods, such as washing machines, steel, and aluminum. By August, however, Trump levied tariffs of up to 25% on entire countries—notably, China, the EU, Canada, and Mexico.

In his second term in 2025, by contrast, Trump imposed high tariffs on many manufactured goods and all countries.

As Figure 2 shows, US manufacturing accounted for 11% of GDP before this one-man war on trade began in 2018. By the second quarter of 2025, manufacturing had shrunk to 9.4% of GDP.

Figure 2

Despite Robert Lighthizer having had his hands all over the first-term contraction of US manufacturing output and jobs in late 2018, his fawning February 6 letter about Trump in the Wall Street Journal tries to rewrite their first trade war fiasco as a glorious victory for the shrinking US manufacturing companies and jobs:

“In his first term,” says Lighthizer, “[Trump] did everything possible to change the dynamic. He put tariffs on China, used the threat of tariffs to renegotiate all our major trading agreements, and stopped the counterproductive World Trade Organization dispute process. He also moved the country’s understanding of the problem and acceptance of tariffs as the remedy dramatically in his direction. Prior to the unprecedented Covid pandemic, the results of his presidency were faster economic growth, new manufacturing jobs, real wage increases [and] the beginning of reindustrialization… [emphasis added].”

The whole idea that Trump tariffs would “protect US manufacturing jobs” was all lies then, and it is all lies now.

They’ve been even better on immigration, and are pushing hard on social media:

Recent increases in immigration have rekindled concerns about their effects on government budgets. This paper updates a model of these effects first developed by the National Academies of Sciences, Engineering, and Medicine (NASEM) to shed light on how immigrants, both legal and illegal, and their children affect government budgets. This analysis is the first to estimate the cumulative fiscal effect of immigrants on federal, state, and local budgets over 30 years.

The government first began gathering detailed information on benefits use by citizenship status in 1994. The data show:

• For each year from 1994 to 2023, the US immigrant population generated more in taxes than they received in benefits from all levels of government.
• Over that period, immigrants created a cumulative fiscal surplus of $14.5 trillion in real 2024 US dollars, including $3.9 trillion in savings on interest on the debt.
• Without immigrants, US government public debt at all levels would be at least 205 percent of gross domestic product (GDP)—nearly twice its 2023 level.

These results, which do not account for any of immigration’s indirect, tax-revenue-boosting effects on economic growth, represent the lower bound of the positive fiscal effects. Even by this conservative analysis, immigrants may have already prevented a fiscal crisis.

Plenty of detail at the link, including robust data showing that low-skill undeclared immigrants are still a net positive from both economic and fiscal points of view. And I must have seen this like two dozen times in the past two weeks, which means that they think it’s worth their while to invest heavily to push this hard on social media. And it’s a robust argument, not mealy-mouthed; pretty much all immigration is a net economic positive for the United States with benefits widely shared. They’re directly challenging Trump on his core issue, which tells us something about Trump’s coalition.