Michael Strain writes for the Financial Times about a long-term political fight tied to Donald Trump’s electoral win.
Donald Trump’s stunning return to power cements his status as a figure of historic consequence. His influence began in 2015 with that now-iconic ride down Trump Tower’s golden escalator and vice president-elect JD Vance, among others, will work to ensure that it extends well into the next decade. We live in The Age of Trump.
Even as a second-term president, he will wield enormous power, particularly if his party controls the House and Senate, as seems likely to be the case for the next two years. But Trump is nonetheless a lame duck, term-limited by the US Constitution. The battle for the future of the political right began on Wednesday morning.
The first front in that fight will be several pressing policy decisions that will expose the biggest rift in the Republican Party and those that surround Trump: the divide between populists and traditional “supply side” conservatives.
First, tax. Next year, Republicans will be responsible for reforming the tax code when provisions of Trump’s 2017 tax law expire. Populism is sceptical of big corporations, and Vance — more of a Trumpian populist than Trump himself — argued as recently as May against further reductions in the corporate tax rate. Vance has staked out other positions against big business, as well.
But Trump is siding with traditional pro-business conservatives, championing further reductions in the corporate rate, on top of those he enacted in 2017.
Similarly, several prominent populist Republicans have supported Lina Kahn, the Biden administration’s controversial antitrust enforcer, for going after Big Tech and more aggressively enforcing competition policy. But in another victory for pro-business conservatives, Trump is expected to replace Kahn. His re-election has unleashed a wave of optimism that the next four years will see more mergers and acquisitions.
Populism seems certain to lose some big fights because Trump will back traditional GOP policies. It also seems likely that his supply side policies have a better chance of enduring than his populist ones. Over the longer term, political success must rest on a foundation of policy success — and the evidence suggests that populist policies such as tariffs do not improve economic outcomes for workers and households.
