Navigating a New Landscape

Trade, immigration, and the politics of 2025

One of my underlying assumptions is that politics is essentially a dynamic affair. The very consequences of a political dispensation undermine it. This means that part of effective politics is adapting to those changing circumstances, even though there are often factions within a political coalition that benefit from the status quo.

It was arguably the inability of the neoliberal elite to adapt that enabled Donald Trump’s political ascent in 2015. Trump’s near-decade at the top of the GOP has allowed for the formation of a new political elite—a MAGA establishment, if you will. However, the viability of this new political bloc will depend on its ability to deliver and adapt.

Three pieces of mine this week reflect in different ways on that situation. In National Review, I made a case for how the failures of the Great Awokening reveal why it should not be a model for the political right.

Some on the right have envied the ability of the identity-politics Left to seize the commanding heights of progressive politics and enact a top-down social revolution. The prophets of the Great Awokening might have been few, but through sheer discipline they were able to capture one institution after the next. By this way of thinking, the Great Awokening could offer a template for a “based” counterrevolution, in which a Rightist vanguardist faction can enact its own revolutionary reckoning…

However, the fantastic leverage of the “woke” vanguard also meant that its hegemony could be sweeping but brittle. The constant purges and rictus paranoia at the commanding heights caused elite institutions to become increasingly estranged from the body politic at large. From public outrage over the antisemitic demonstrations at elite universities to Donald Trump’s triumphant return to the White House, the bill for that revolutionary borrowing against institutional credibility has begun to become due.

Matthew Gasda offered a similar diagnosis of the corrosive politics of the Awokening here: “Ironically, even while the Great Awokening became an invisible social church for liberals, its practices and intellectual principles were never liberal; they were always illiberal. They were never about democracy, but about re-envisioning America as a country run by a board of ethical experts, by various committees for public safety—a Jacobin America.”

Instead, the political right needs to recognize the heterogeneity of its coalition and embrace pluralism. One of the reasons for Trump’s political success is his ability to think coalitionally rather than ideologically—giving a little here for X and a little here for Y. That offers a framework for navigating the complexity of the new Republican Party.

In light of the dynamic nature of politics, I outlined a “low-salience strategy” for immigration enforcement at UnHerd. The breakdown at the border has given immigration hawks a political opening—but they will need to be careful in order to avoid an immigration backlash of their own.

In order to address the competing impulses of the American people, Trump might adopt a low-salience strategy of enforcement. This approach would involve tightening border controls and interior enforcement while also trying to avoid spectacles that could tug at the heartstrings of swing voters.

This kind of strategy could incorporate a range of policies. In June, Joe Biden performed a sudden U-turn and issued an executive order that curtailed the ability of migrants to seek asylum if they were intercepted while trying to cross the border between official ports of entry. This policy dramatically reduced unauthorised migration, and extending it or expanding it could help restore order at the border. Since many migrants pass through another country (especially Mexico) on their way to American borders, negotiating agreements with third-party countries can help deter a flood of asylum seekers.

The point of this kind of strategy would be to try to decrease the incentives for unauthorized migration while also restoring the credibility of immigration enforcement. One way to do that would be having universal E-Verify to ensure the legal status of workers, and some Republicans (including JD Vance) have proposed expanding E-Verify while boosting the minimum wage as part of a full-spectrum pro-worker agenda.

As this American Conservative piece by Jim Antle demonstrates, I’m not alone in warning about the risks of a backlash—or seeing some value in the E-Verify deal.

Current debates over trade and globalization reveal the stakes of political change. COMPACT has just released a long-in-the-works essay of mine on the way that trade paradigms undermine themselves. I can’t get into all the details here (read the whole thing over there!), but I’ll emphasize two points: politics (not economics) has often been the primary driving force of trade policy for the United States, and the political conditions that enabled post-1989 high neoliberalism no longer obtain.

In part because of the transformative successes of globalization, the world is very different than it was in the 1930s or even the 1990s. According to International Monetary Fund data, the United States made up a fifth of the global economy (when adjusted for purchasing power parity) in 2000, while China made up 7 percent. Today, the People’s Republic’s share is at 19 percent, while America’s has dropped to 15 percent. A raw calculation of GDP would give the United States more of an edge, and some analysts dispute Chinese statistics. Nevertheless, the trend is clear: The United States used to have an overwhelming advantage over China, but now the two countries are much closer to parity. In 2000, the United States also had a clear edge for manufacturing high-end capital goods over China. Today, the Middle Kingdom outproduces America in that export sector, as a recent report from Sen. Marco Rubio’s office demonstrates.

Since the 1980s, whole sections of the American industrial infrastructure have been vaporized. The consequences of this disappearance can’t be reduced to quantitative economic models.

American national-defense supply chains have grown very brittle, the PRC is currently funneling vast sums of state subsidies to exporters, and the global shocks of the post-pandemic era reveal the limits of the globalization model circa 2001. These geopolitical realities demand, I would argue, a paradigm shift to a “resilience” model. It’s not a choice between “free trade” and “isolationism.” Instead, it’s a choice between reforming trade policy and facing a geopolitical (and economic) reckoning.

Of course, how to do that is one of the big questions for the years ahead.

Noah Smith

offered some thoughts along those lines recently. He underlined the geopolitical stakes of this situation: those who argue for the pre-Trump status quo on trade are essentially calling for the continued diminution of U.S.-led alliances.

In the year 2000, the United States and its allies in Asia, Europe, and Latin America accounted for the overwhelming majority of global industrial production, with China at just 6% even after two decades of rapid growth. Just thirty year later, UNIDO projects that China will account for 45% of all global manufacturing, singlehandedly matching or outmatching the U.S. and all of its allies. This is a level of manufacturing dominance by a single country seen only twice before in world history — by the UK at the start of the Industrial Revolution, and by the U.S. just after World War 2.

Also at COMPACT, David P. Goldman laid out some major economic challenges facing this new paradigm—and ways to address them.

What do we have to do?

1. The corporate tax system (including the 2017 reform) penalizes capital-intensive investment. Allow corporations to write off the whole investment in equipment in the year it’s invested.

2. Offer low-interest student loans for degrees in hard science, math, and engineering, and forgive the loan if the student teaches in grade school for six years.

3. Use the community-college system to train high-school graduates in industrial skills, in partnership with private industry.

4. Restore federal R&D funding to Reagan levels (about 1.3 percent of GDP, double what it is now).

5. Slash environmental regulation to fast-track plant construction.

6. Protect key industries (like electric vehicles) with tariffs, but don’t impose tariffs across the board; that will raise the cost of capital inputs for US businesses and hurt consumers.

7. Build a national 5G (and now 6G) broadband network, a critical factor in industrial automation.

I think there could be a political consensus for a lot of what Goldman proposes. I’d add that cutting energy costs would be an essential part of building out manufacturing.

Importantly, a lot of these measures are pro-growth. Investing in building out the manufacturing ecosystem could help working-class families, but it could also encourage more economic dynamism.