Trump's tariffs blow the Republican coalition in two

What now?

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If you want a rough and ready way to understand the Republican Party as it has existed for the past sixty or so years, you can do worse than seeing it as a fusion of the business elite and nativist populism. For a long time, the basic formula of Republican politics was to use nativist and populist “wedge issues” to win elections but then use the power of government to implement a mostly pro-business agenda.

This mode of politics was made possible by the dominance of the party’s pro-business elite, who for a long time held most of the centers of power - control of the Republican National Committee, the support of Fox News, and the fundraising apparatus. These guys were powerful and wealthy, and yet at the same time they were numerically fairly small - there weren’t enough of them to win national elections. And so they latched onto issues like immigration, gun rights, abortion, and lib-bashing in order to mobilize their voters, most of whom they privately saw as hicks and rubes.

For grassroots conservatives - the hicks and rubes - this situation was galling. On the one hand, the Republican Party usually had leaders who gave lip service to their desires and grievances. But at the end of the day, those leaders wouldn’t do too much to actually act on them, usually citing institutional barriers like Roe or the need to be mainstream enough to win as reasons for inaction. And so the activists had to settle for the spectacle of Mitt Romney trying to keep a straight face long enough to claim that he was “severely conservative”, or for pinning their hopes on hopeless candidates like Rick Santorum, Mike Huckabee, and Mike Pence.

When Trump brought that world to an end, it was as the candidate of grassroots grievance. In 2016, he smashed the Republican establishment even more convincingly that he smashed the Democrats. But even his first administration ultimately followed the same basic pattern of policymaking. Trump turbo-charged the grassroots grievance, and he did - mostly through chance - finally manage to get an anti-Roe majority on the Supreme Court. But when it came to actual policy changes, his signal achievement was a massive tax cut for the wealthy.

Going into his second administration, some people were still wondering how Trump would balance the demands of the business elite and the grassroots. Whose side was he really on?

I think it’s fair to say that after beginning a global trade war that has knocked $11 trillion off U.S. markets, not many people are wondering anymore.

Part of what makes Trump’s tariff move so audacious is that it is the final nail in the coffin of this old way of doing GOP politics. It’s a declaration of war not just on the business elite but on basically everyone in the economy who is not the avatar of a Trump supporter - the white working-class factory workers who Trump seems to think once made up the whole country and can do so once again. It’s a cry of grievance and vengeance which aims to bury the old elite and build a new one in his own image.

Please don’t misunderstand me - I’m not claiming that Trump has suddenly become a true champion of economic justice. Far from it. This trade war has nothing to do with the broader struggle to make regulated capitalism work well for America and the world. Within the context of American national politics, his idea of what the society and economy should look like is radically regressive. But within intra-Republican politics, it is an earthquake almost without precedent.

To be sure, there were foreshocks. The Tea Party of the Obama years set itself against the sort of immigration and fiscal policies that keep America’s business elite humming. Many Tea Party groups opposed the Troubled Assets Relief Program which bailed out many banks in the aftermath of the financial crisis. But these groups were still relatively marginal, protesting Republican congressmen and running primary challenges against them.

Likewise, there have always been forms of conservatism whose opposition to “the establishment” and “the elite” extends to big corporations and big banks. The conservatism of Orange County or Manhattan is alien to the conservatism of Iowa. It’s even alien to the conservatism of Bakersfield or Staten Island. Viewed from the type of place that Hothschild documented in Strangers in Their Own Land, there’s not as much difference between a liberal NGO based in New York City and a conservative international investment bank in the same place.

Until now, this uneasy alliance of the business elite and their nativist supporters was kept in check by the fact the business elite ruled. They were using the grassroots, and in pursuit of that they didn’t shy away from whipping it up, telling it lies, and encouraging its worst impulses. They thought they would rule for ever. They were wrong.

If Trump is nothing else, he is the unrestrained id of grassroots conservatism. Of course, he will continue to try to make profits of his own - in fact, he was doing just that last week as the markets cratered. His control of the presidency and appetite for corruption means that he and his family will be fine. But for now at least, he has declared war on the profits of virtually everyone else.

We are currently in a crisis, and crises are particularly poor times to predict outcomes. But if Trump continues down this path, he may force something hitherto unthinkable - the detachment of the business elite from the Republican Party. Perhaps the realization will dawn that democracy, the rule of law, and stability in decision-making are not nice added extras but fundamental necessities for capitalism to function and profits to be made. Now that Trump has remade the party in the irrational, angry image of its base, it may be time for capitalists to leave it.

Such a development would be a tremendous boon to U.S. democracy, placing enormous financial resources on the side of defenders of the constitution. It would give Democrats leverage to demand reforms to capitalism as the price of defending it. It would turn this trade war into the biggest mistake Trump has ever made.

But another, less optimistic, future is possible. It may be that Trump’s strategy will work: that he will manage to intimidate and cow the American business community. He will make it grovel for tariff relief and pay him fealty in return. He might manage to transform corporate America into an arm of his movement, a reversion of the old Republican formula whereby the business elite rule and the grassroots obey.

This is the crossroads at which America stands. The course of future decades depends on which path is taken.

Thanks for reading America Explained. If you haven’t already, please consider upgrading to a paid subscription. This will enable you to read all of this post and access the full archive. It will also enable me to put more time and energy into this newsletter, something that I’m hoping to do in order to cover the new administration more thoroughly. If you’re already a paid subscriber, thanks for supporting independent media and making it possible to do what I do.