Imagine you are the CEO of an American auto manufacturer. On the one hand, you have Trump driving up your prices with tariffs, screwing up your supply chains, and telling you to build cars that run on gasoline. If you comply with his wishes, you will effectively be giving up all of your overseas markets. On the other hand, the Democrats might win power in 2028, and they want more electric cars. How do you plan for the future?
It’s a difficult task, to be sure. You probably hedge your bets. You reduce the production of electric cars, but not to zero, and wait for the next change in policy.