Last week, Trump announced that the U.S. will, for 90 days, admit up to 300,000 metric tons of ground-beef product without the normal out-of-quota tariff, and that he has obtained a “commitment” that the beef will be sold 25% below current market prices. This comes on top of February’s much smaller measure allocating an extra 80,000 metric tons of tariff-free lean beef specifically to Argentina. Depending on where you get your news, this either “enraged” or “irked” American cattle barons, a loyal Trump constituency who now find themselves, like everyone else, screwed.
My immediate reaction to this was, “That sounds like some Third World shit.” A little research would bear this intuition out: this is something like a practice of developing nations. For example, Nigeria during the oil boom of the 1970s. Faced with rapid inflation and shortages of consumer goods, the military government created the Nigerian National Supply Company to import staples such as rice, sugar, milk and fish. The government reduced or eliminated duties on selected goods and imported others directly for resale at subsidized prices. A contemporary World Bank mission reported that Nigeria’s Meat and Livestock Authority was actually flying in 300 tons of chilled beef every week, while many government imports were being sold domestically “at, or below, cost.”
The Nigerian government established the National Supply Company specifically to bulk-import consumer goods—including beef—and resell them at subsidized prices as an anti-inflation measure. The government was more afraid of the political consequences of angry consumers than ticked-off domestic producers.
Another example comes from Indonesia during Suharto’s New Order regime. Suharto came to power after the chaos of the Sukarno years, which witnessed inflation and repeated rice shortages. The new regime promised stability, and it used the state logistics agency, BULOG, as a kind of valve to adjust rice prices. The regime set a floor price to support domestic producers and a ceiling to keep consumers from feeling the squeeze of inflation. This contradictory mandate worked well enough for a time: When prices fell too far, BULOG bought rice; when prices rose too far, it released stocks or imported rice. But in the early 1970s, a bad harvest coincided with a global food shortage; BULOG could not import enough rice to meet demand. The rioting that plagued the Sukarno regime returned, and the regime had to scramble to import even expensive rice to meet demand.
Needless to say, these import-licensing schemes and carve-outs create great opportunities for corruption or “political capitalism,” as Riley and Brenner have described it. Once access to a market depends on exemptions, waivers, quotas, or discretionary permits, profits increasingly flow not simply from producing more efficiently but from securing privileged access to the state. The barrier itself creates a rent; political influence determines who gets to collect it. Firms will cultivate patrons, lobby for special treatment, or position themselves as indispensable intermediaries between the executive and the market. In that sense, the apparent chaos of constant exceptions can be politically functional: it turns economic policy into a system for distributing favors, disciplining rivals, and binding business interests more tightly to the regime. BULOG’s control over imports of rice, wheat, sugar, and soybeans meant that access to scarce commodities—and to the large rents created by the difference between domestic and world prices—could be allocated politically. Under Suharto, those privileges were regularly intertwined with regime-connected firms and cronies.
Trump’s tariffs increasingly function less like uniform rules than as the opening bid in negotiations between firms and the state. For instance, Pharmaceutical companies can obtain tariff exemptions by reaching pricing and investment agreements with the administration. An even clearer example comes from the polysilicon sector: Trump imposed new Section 232 tariffs, but simultaneously authorized Commerce to approve company-specific “onshoring plans.” If Commerce approves a firm's plan, that firm can import covered products and production equipment without paying the tariff, in quantities Commerce judges commensurate with the firm's investment. Commerce can vary the benefits and later rescind them if it decides the company has not lived up to its commitments.
To sum up, the government first creates a rent by restricting market access, then acquires the power to distribute that rent through exemptions and carve-outs. Under such circumstances, cultivating political access can become as important to profits as lowering costs or developing better products. In February, Democratic senators charged that the administration had granted thousands of product exclusions through a non-public process, alleging that politically connected industries had benefited disproportionately. Senators Warren, Blumenthal, and Kim are currently investigating a Korean conglomerate, Base Group, over a $2 million payment to a Trump company while the conglomerate faced a Trump-administration trade investigation. The senators explicitly asked whether the payment was connected to an attempt to obtain favorable tariff treatment.
It’s worth noting here that this is not really protectionism per se, which can be quite regular and boring: you have some rationalized system of tariffs—a clear-cut policy—that’s supposed to end up with a specific result. This is more like something you might call a “discretionary economy, where things move at the personal discretion of the Big Boss or one of his plenipotentiaries. The developmentalist pretext, where the regime is defending domestic industry, is conveniently compatible with the needs of corruption.
Now we get to the inevitable “I told you so” section of the newsletter. Back in February 2025, I characterized Trump’s economic approach as “juggling” different needs, interests, and constituencies and that his constitutive unit of economic analysis, so to speak, is the “deal:”
Trump’s big thing is the deal, which is essentially a personally worked-out negotiation, an arrangement, a carve-out. He understands the economy as a series of exceptional situations, not as some machine or abstract system that has a regular logical progression. As a result, he is willing to grant exceptions and carve-outs to keep things going: this business will get this treatment, that guy will get this, and so and so forth.
The “juggling” aspect of Trump’s policy shifts looks an awful lot like Marx’s famous skewering of Napoleon III:
The contradictory task facing the man explains the contradictions of his government, the confused and fumbling attempts to win and then to humiliate first one class and then another, the result being to array them all in uniform opposition to him. This practical uncertainty forms a highly comic contrast to the peremptory and categorical style of the government’s decrees, a style faithfully copied from the uncle.
Industry and trade, i.e., the business affairs of the middle class, are to flourish under the strong government as in a hothouse. Hence the grant of innumerable railway concessions. But the Bonapartist lumpenproletariat is to enrich itself. Hence fraudulent manipulation of the Bourse with the railway concessions, by those already initiated. But no capital is forthcoming for the railways. Hence the Bank is obliged to make advances on the railway shares. But the Bank must simultaneously be exploited by Bonaparte, and therefore must be cajoled…
The US beef producers find themselves now “humiliated” as Trump favors the needs of consumers.
What I didn’t fully develop back then, though, is that this is a feature more than a bug, as the cliché goes. It has a clear political logic that empowers the executive as the dispenser of favor and insult. But of course, it is contradictory: you can’t make everybody happy all of them, and then, as Marx predicted, you end up making everyone mad. That’s sort of what’s happening, I think, as Trump’s numbers on the economy are cratering.
There’s another level of question here that I can’t carry out in today’s newsletter, but that recommends Brenner and Riley’s work and other attempts to synthesize the contemporary conjuncture: Trump’s idiosyncrasy aside, why at this moment are political actors in the United States behaving in this “Third World” way?
Trump's Art of the Deal, or how to run a huge economy like a two-bit mobster.
My sister worked in Ecuador for many years at a fancy private school teaching English literature to the children of the Ecuadorean elite. Many of the kids came to school accompanied by armed guards. She recently told me she's really getting 'Latin America vibes' here at home.