What comes next?
The return of Congress from its August recess brings a critical inflection point for President Trump, who has used the first phase of his second term to swing a wrecking ball through the American establishment with astonishing speed and force. From MAGA enthusiasts to No Kings protesters, whether one sees outdated shibboleths justly demolished or a precious inheritance tragically wasted, everyone agrees on the astounding scope of the changes wrought: the global economic order upended, the border secure and deportations underway, foreign aid programs gutted and entire agencies shuttered, Ivy League universities brought to heel. But what now?
Each of these actions was a necessary first step toward the kind of reform championed by the administration’s officials and supporters. New trading relationships cannot take form until partners accept that the old arrangements are over. Employers will not begin thinking about how to create jobs that Americans will do until they lose easy access to a supply of illegal and easily exploited workers who will take jobs that Americans won’t. Universities have shown for a decade that enough money on the line will send them scurrying to develop a new campus in Qatar, but no amount of criticizing and cajoling would move them one inch closer to the cultural mores or economic priorities of the nation on which they depend.
Watching the demolition was thrilling for those fed up with the old and eager for the new. And though the economy shows some signs of slowing, prices have risen less than expected and the unemployment rate remains low. Despite dark predictions from the president’s harshest detractors, the assembly lines have not ground to a halt, the crops are not rotting in the fields and the Social Security checks continue to arrive on time.
It’s the next stage, however, that will define Mr. Trump’s legacy: Can he and his administration move past the demolition, clear the debris and, well, build back better? The pain imposed thus far has been intentional, is proving tolerable and will be well worth the cost if it helps to move the economy and various national institutions onto a stronger long-term trajectory. But without follow-through the nation will see the pain without much gain. Does he have the will to pursue his promise of a new golden age for American workers and their families?
While Mr. Trump owes his political success to reorienting the Republican Party toward working-class priorities, his own priorities have often appeared to lie elsewhere. His first-term tax cuts, extended at immense cost in his signature domestic policy law, were taken straight from the old G.O.P. playbook. His cryptocurrency push serves the narrowest of special interests. Yet the past six months have demonstrated that where the president identifies a priority, this administration is fully capable of providing detailed policy and coordinating complex execution. He can deliver on the vision he was elected to pursue if he can minimize the chaos and provocation and elevate making America great again from a slogan to his animating project.
The president has promised to reshore manufacturing, restore balanced trade and counter China’s industrial dominance. This would have been impossible under a World Trade Organization that tolerated wild distortions in the international economy and turned a blind eye especially to China’s abuses. But if Mr. Trump has succeeded in rendering the W.T.O. irrelevant, what replaces it?
Right now we have a series of provisional bilateral agreements at varying tariff rates facing serious legal challenges, hinging on ill-defined investment commitments that the president seeks to direct himself. Negotiations in that direction were a necessary step, but an allied bloc ready to counter China’s scale will not form and corporations ready to rebuild the American industrial base will not invest until the ground stops shifting and the new model becomes clear.
The Trump administration will need to stitch together and harmonize the various agreements, work through Congress to establish permanent, legislated tariff rates and, finally, articulate a clear plan for decoupling from China — for the United States itself, and for the other countries in the emerging U.S.-centered trading bloc. The president’s effort at collecting investment commitments will need to translate into foreign corporations building new factories on U.S. soil if it is to foster productive enterprises rather than boondoggles. His idea for a sovereign wealth fund that uses public funds for private sector investments will need to be codified by Congress and given a clear goal of developing sectors where leadership is vital to future innovation, resilient supply chains and national security.
All these steps have been made easier by the work already done. As recently as last year, key partners would have been unlikely to accept a permanent trading bloc that requires balanced trade and exclusion of Chinese investment and supply chains. Compared with where things stand today? The arrangement is a plausible and appealing one. Likewise, the Trump-Vance platform’s call for a 10 percent global minimum tariff, and for moving from permanent normal trade relations with China to tariffs of 50 percent to 60 percent, would long have seemed impossible. Now they have much-deserved bipartisan legislative support and markets seem to have adapted already. The Secure Trade Act, introduced recently by Representative Jared Golden, Democrat of Maine, and Representative Greg Steube, Republican of Florida, would place the new tariff regime on sound footing.
Still, while such moves would all be consistent with Mr. Trump’s agenda, many conflict with his instincts, at least some of the time. On China, for instance, he has taken a hard line in some contexts but seemed desperate to strike a deal in others. One minute he is restricting the sale of advanced semiconductors from Nvidia; the next he is licensing the sales at the behest of Nvidia’s chief executive. His administration has pressed allies to exclude China from their supply chains, but he has suggested he would welcome Chinese firms setting up shop to manufacture in the United States. The best example of the targeted investment he wants to spur in vital industries is the CHIPS and Science Act, the bipartisan Biden-era legislation that is succeeding in bringing advanced semiconductor manufacturing back to the United States. But Mr. Trump criticizes that effort at every opportunity, even despite his administration’s support for similar legislation on shipbuilding and the Pentagon’s recent unprecedented investment in a rare-earths company.
A parallel story is playing out on immigration, where the administration’s success in securing the border and initiating large-scale deportations has fundamentally shifted the political terrain. The question is no longer whether enforcement will happen, but how. To steadily reduce the population of undocumented immigrants and create better labor market conditions for American workers, the government needs a mandatory system for businesses to check the legal status of employees, and harsh penalties against employers who fail to do so. Compared with the chaotic alternative of ad hoc, site-by-site raids, this offers a more gradual, civil and efficient approach to enforcing the law that even some Democrats, and influential groups like labor unions, may be interested in pursuing.
Here, too, the administration’s inclinations have cut both ways. On some days, Immigration and Customs Enforcement has targeted work sites with aggressive raids. On others, the president has floated grants of amnesty to workers when employers would find it convenient to retain the cheap labor, or “touchback” provisions to briefly send some immigrants to their home countries and then welcome their return. In response to complaints of labor shortages in agriculture and hospitality especially, Mr. Trump has also indicated an interest in expanding the temporary visa programs that allow employers to rely on foreign seasonal workers. But pressure on employers was supposed to be the point, at least in labor market terms; relieving it would once again leave American workers out in the cold.
“Landing the plane,” in the administration’s parlance, depends on creating long-term certainty for all involved. Businesses need to understand what labor market conditions will look like in the future if they are to make appropriate investments in the present. Employers and employees both deserve the chance to make arrangements for orderly departures. Someone who has lived illegally but peacefully in the country for a decade deserves greater lenience than someone who has recently entered or committed crimes while here. Everyone, consumers too, benefits from a smooth transition and time to adjust.
Rather than promoting temporary worker programs, the administration should establish a predictable schedule for phasing them down while also supporting investment in new technology to help farmers automate. A more automated agricultural sector would require fewer workers, alleviating any concern about labor shortages. The new jobs would be better ones at higher wages — exactly the evolution that American workers need.
In education, the challenge is most straightforward. The traditional higher education system has been serving most students poorly. Shifting focus and resources is entirely warranted. But shifting toward what? The administration has indicated interest in increasing funding for trade schools, but building up new noncollege pathways requires a concrete plan. The American Workforce Act, for instance, cosponsored by Vice President JD Vance when he served as a senator, would support the cost of on-the-job training for new workers in the same way tuition grants support students on campuses. Employers could deliver training in-house, partner among themselves and with labor unions or pay community colleges to create programs tailored to their needs. Public funds, which could be reallocated in part from current spending on higher education, would help foot the bill.
Meanwhile, critics like John Ioannidis, a professor at Stanford University’s medical school, have been highlighting problems with federal research spending for years. Research grants have been overconcentrated at a narrow set of institutions; too much funding goes toward overhead; results often fail to replicate; and so on. Just slashing the funding will not improve matters, but rerouting it could — better accomplishing the administration’s goals in a way that might even earn widespread support. Here’s an idea: Cap how much federal funding can flow to any metropolitan area, ensuring that grants are distributed more widely. Scientists can all compete for one pool of dollars in Cambridge if they want, or they can consider setting up labs at many of the other outstanding public universities in regions that have been left behind. I discussed the idea recently with the M.I.T. professor Simon Johnson, a recent winner of the Nobel in economic science, and he was enthusiastic about the prospect.
A common thread running through all these potential transitions is investment in the American work force. Manufacturers say that hiring challenges are among the key obstacles to increasing their output. To build more housing, data centers, energy and infrastructure, the construction industries need a new pipeline in the skilled trades at the same time immigration enforcement removes other sources of labor they have relied on. In every sector, doing more with fewer workers is the formula that Mr. Trump should be counting on. It also happens to be the tried and true formula for sustainably raising wages. But it will only work if we build up the institutions, from new noncollege pathways to new roles for labor unions, that can help workers take advantage of the opportunities.
On one hand, building is entirely consistent with the Trump brand, the message he has been delivering for a decade and the policy agenda he has endorsed this term. It would be popular not only with his base but also with many Americans otherwise skeptical of or outright hostile to his approach. On the other hand, if he would rather search for more outdated structures to tear down, he can surely find them. His administration’s prospects thus turn on Shakespearean quandaries about human nature and motivation more so than details of policy design.
Gallup reports that Mr. Trump’s approval rating has fallen by seven points since Inauguration Day, leaving him behind every other president since mid-Watergate Nixon this far into a first or second term. The prospect of a government shutdown looms this fall, and the midterms will soon appear on the horizon. Can Mr. Trump govern in the style the moment demands? Only the developer who follows demolition by laying new foundations and starting construction is remembered fondly when he is gone.
Oren Cass, a contributing opinion writer, is the chief economist at American Compass, a conservative economic think tank, and writes the newsletter Understanding America.
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: [email protected].
Follow the New York Times Opinion section on Facebook, Instagram, TikTok, Bluesky, WhatsApp and Threads.
The post Can Trump Build or Just Demolish? We’re About to Find Out. appeared first on New York Times.
