The Trump administration’s challenge is Trump
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Opinion US politics & policyThe Trump administration’s challenge is TrumpConvoluted messaging and conflicting policies have been hallmarks of the president’s yearOren CassAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTDonald Trump’s approval rating has steadily declined overall as well as on the economy, inflation and even immigration © Alex Brandon/APThe Trump administration’s challenge is Trump on x (opens in a new window)The Trump administration’s challenge is Trump on facebook (opens in a new window)The Trump administration’s challenge is Trump on linkedin (opens in a new window)The Trump administration’s challenge is Trump on whatsapp (opens in a new window) Save The Trump administration’s challenge is Trump on x (opens in a new window)The Trump administration’s challenge is Trump on facebook (opens in a new window)The Trump administration’s challenge is Trump on linkedin (opens in a new window)The Trump administration’s challenge is Trump on whatsapp (opens in a new window) Save Oren CassPublishedDecember 12 2025Jump to comments sectionPrint this pageUnlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldThe writer is an FT contributing editor, chief economist at American Compass and writes the Understanding America newsletter Judging from the data, President Donald Trump should be riding high. The experts had warned that his unprecedented resetting of the global economic order and reversal of the migration inflow would spell economic disaster. Instead, capital investment and industrial output have held strong. The unemployment and inflation rates have remained low. Real wages are up. Markets are making new highs. On Wednesday, the Federal Reserve cut interest rates for a third time in a row while dramatically improving its growth outlook for the coming year.But Americans are unimpressed. Trump’s approval rating has steadily declined overall as well as on the economy, inflation and even immigration. The problem is that convoluted messages and conflicting policies have been hallmarks of the president’s year, and he seems determined to make matters worse. With “affordability” the buzzword on everyone’s mind, Trump on Tuesday called the issue a “hoax” and advised parents, “You don’t need 37 dolls for your daughter. Two or three is nice.” These remarks provide a quintessential illustration of the challenge that bedevils Trump’s second term. Voters have no way to understand the White House’s strategy or assess whether it’s working. What is the actual premise and implications of tariffs? Are they paid by foreign countries, as he argues sometimes, or do they land on American consumers, as he concedes at others? Are prices going up or down? What sacrifice is being asked, and for what purpose? Is China an adversary or a partner? Sometimes, US policy prohibits the sale of AI chips to China and pushes allies to keep China out of their markets. Other times, Trump promotes the sale of more powerful chips, or muses about Chinese firms setting up shop stateside. Are cheap foreign workers good for the US economy or bad? Sometimes the administration is forcing them out, other times trying to bring more in. Trump’s repeated suggestion to admit 600,000 Chinese students to the same US higher education system he has attacked is a particular head-scratcher. Is industrial policy to rebuild critical domestic production capacity wise? Sometimes the president trashes the Chips Act, other times he celebrates its results and goes even further in his market interventions.
The White House was apparently blindsided by the arrest of hundreds of skilled Koreans bringing a new Hyundai battery plant online, but one can forgive the Department of Homeland Security for having no idea whether the situation called for performative cruelty or turning a blind eye. No coherent plan exists for welcoming foreign specialists to develop the domestic workforce. Trump’s iconoclastic, ambitious agenda represents his administration’s greatest promise, but also its greatest challenge. Of course, messaging is a concern for any presidency but the imperative to deliver a coherent, consistent argument is much more pronounced when that argument is unconventional. The trends that Trump seeks to reverse are not the ebbs and flows of the past four years but the downward slide of the past 40. His prescription is not a painless set of quick wins, but a fundamental reorientation of the US economy that comes with substantial short-term costs on the road to much larger long-term benefits.Building and maintaining support for that agenda requires a forthright description of the upfront cost and an explanation of what it buys. Re-industrialisation requires forgoing access to some goods that could be purchased more cheaply from abroad. A “high-road” labour market, in which employers offer good jobs that Americans will do, requires acceptance that services will cost what it costs to ensure that service providers can support their families. A supportive, predictable policy environment both minimises those costs and gives people confidence that the positive return will follow. When it comes to affordability, the primary cause of the crunch facing families is not the inflation spike during the Biden administration, but a decades-long trend that pushed middle-class security out of reach for the typical breadwinner. Our research at American Compass shows that in 1985 the median male worker could afford housing, healthcare, transportation, food and higher education for a family of four on 40 weeks of work, but by 2020 he would need to work for 62 weeks, in what was still a 52-week year.The intensive focus on cost of living when inflation did surge gave this crisis an unprecedented salience, but bringing inflation back down does not resolve it. Indeed, no policy can relieve the pressure quickly. People are not satisfied with lower inflation, because that does not make things feel any easier than they were the year before. Claiming you are bringing prices down when you are not, and cannot, is a sure loser. President Trump will need to level with the American people. Recovery will take time, and shortcuts are counter-productive. The Biden years should be sufficient proof that trying to deficit spend our way to prosperity accomplishes the reverse. What’s needed is genuine acknowledgment of the problem, a plausible account of its source and a compelling plan to make progress. Tell people what early signs they can expect to see, if the plan is working, and then follow through with demonstrating that the nation is on track. The good news is that the American people are perfectly capable of digesting and supporting such an approach.
As Ronald Reagan took office in 1981, the Fed was in the process of fighting stagflation by increasing interest rates to nearly 20 per cent. The stock market plunged nearly 30 per cent and a sharp recession ensued. On the eve of the 1984 election, the unemployment rate was still above 7 per cent. But it was “morning in America”, and Reagan won 98 per cent of the electoral votes.Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Oren Cass Add to myFT Global Economy Add to myFT US economy Add to myFT US politics & policy Add to myFT Donald Trump Add to myFT Comments