If the United States is to keep up with China in artificial intelligence and other emerging technologies, we must allow the private sector to lead the way with minimal government meddling. Unfortunately, under President Trump, who’s supposed to be a free-market guy, we are lurching into China’s model of heavy direction by the government, called state capitalism. Examples of this sort of intervention by the government include the extensive use of subsidies. History shows this is the route to disaster, such as the disastrous Solyndra loan of $535 million to the Fremont-based solar-panel company – which went belly up under President Obama. A bit less onerous are manipulations of the tax credit to help prop up industries, such as the $7,500 federal tax credit for electric-vehicles set to expire on Sept. 30. Trump rightly canceled that one. But the worst sort of industrial policy is where the government owns a stake in a company or gets a cut of its revenues. That boosts government favoritism, distorting the market and risking backing inefficient companies and products. Unfortunately, the Trump administration is going to do that in the microchip industry. To get beyond Trump’s April ban on selling the most advanced microchips to China, his administration worked out a deal with Nvidia and AMD “to share 15% of their revenues from chip sales to China with the U.S. government,” reported AP. Both companies are located in Santa Clara. Nvidia is the world’s most valuable company, with a market capitalization of $4.42 trillion, while AMD is 35th, at $301 billion. The dubious reason for the ban was to protect national security. But that’s obviously not the case if the chips are sent anyway, just with the government grabbing a cut. A big hurdle to this should be the Export Clause in the U.S. Constitution: “No Tax or Duty shall be laid on Articles exported from any State.” “There’s clearly no authority for Congress to be able to do this, let alone a president,” international trade attorney Doug Jacobson told Barron’s. In the 1998 case U.S. vs. U.S. Shoe, the Supreme Court unanimously affirmed, “We held in United States v. International Business Machines Corp. … that the Export Clause categorically bars Congress from imposing any tax on exports.” On the economic aspect, this is “the same sort of bullying Trump has used against Apple, U.S. Steel and other companies,” Eric Boehm told us; he’s an economic policy reporter at the Los Angeles-based Reason Foundation. “This is a clear signal, if you want to send products out of the country or bring them in, you’ve got to do so, not based on what your customers want, but what the president of the United States wants you to do.” His Aug. 8 article in Reason magazine reported on the Trump-Apple deal. Let’s hope the courts overturn Trump’s 15% export tax. But both Republicans and Democrats in Congress need to fight it, too. Otherwise, there will just be more such anti-market manipulation. California, whose world-leading AI companies will be the biggest hit, should lead the way fighting this attack on the freewheeling market that has put our computer industries on top.