The New Conservative Economic Populism: Shaping GOP Policy in the Trump Era

This reported column is Part Two of Eamon Javers’ two-part series on the new conservative economic populism gaining ground among Republicans close to former President Donald Trump.

In Part One, Javers introduced readers to the new conservative economic populism gaining ground among Republicans close to Trump. Click here to read Part One.

WASHINGTON — The effort underway to define a new conservative economic policy for the age of Trump is driven in part by a changing understanding of who conservatives are and what kind of policy they actually care about.

Leading this change is a cadre of economic populists who reject the political bargain that created the modern Republican Party in America: the marriage of conservative social policy that appeals to rural and evangelical voters with low-tax, laissez-faire economic policy beloved by corporate boardrooms.

As it gains steam, this effort has the potential to reshape both the GOP and U.S. electoral politics for a generation — but only if it is successful.

A New Republican Coalition

For Sohrab Ahmari, a former Wall Street Journal writer, the goal of neopopulist economics is to reverse the hollowing out of the American middle class that he believes has led to many of the pressures on American families driving today's culture wars.

In a Republican Party that increasingly represents “downscale America,” Ahmari argues that there is a political imperative to harness a vast swath of voters he describes as culturally conservative but eager for more social stability in their lives.

These voters, he contends, believe in traditional gender roles but also embrace the economic gains of the New Deal. They love Social Security, support unions — particularly those they belong to — and seek a stable financial foundation, which is not available in a service-sector-based economy.

New Strain of Economic Populism Rises in the Republican Party

Ahmari argues that it is former President Donald Trump’s appeal to downscale America that accounts for his polling gains among Hispanic and African American voters — a trend that has baffled pundits inside the Beltway for months. This also suggests that the Trump coalition in 2024 could be broader than many in Washington or on Wall Street anticipate.

To cement this new coalition together, Ahmari says conservatives need to embrace unions, if not the political leadership of the current union movement. He envisions a reset of the National Labor Relations Act of 1935 to create a broad, sector-wide labor bargaining system, more like a European model.

He also advocates for a higher minimum wage in nonunion sectors, which he would achieve by empowering regional “wage boards,” a resurrection of a New Deal framework used to negotiate pay between workers and companies.

Ahmari would push for more restrictions on immigration, including shutting down the H-1B visa program, which he argues is used by corporations to bring in “indentured servants” whose immigration status is tied to their employer, reducing their ability to push for higher wages.

Conservative Populist Economic Proposals

Below is a list of conservative populist economic proposals, several of which would likely get serious consideration in a second Trump administration:

1. Impose a 10% global tariff on all imports.

2. Block American firms from investing in China.

3. Block Chinese firms from accessing U.S. capital markets.

4. Impose harsh penalties for employers who fail to comply with immigration laws.

5. Eliminate H-2A and H-2B programs for seasonal and agricultural workers.

6. Award H-1B visas to the highest-paying employers.

7. Create a $100 billion National Development Bank for critical infrastructure.

8. Repeal the National Environmental Policy Act of 1970.

9. Reform corporate bankruptcy to mandate six months' severance for all employees and one year’s tax liability for local communities.

10. Require private firms hired by public pension funds to publish annual performance data.

11. Impose a financial transaction tax of 10 basis points on secondary market sales of stocks, bonds, and derivatives.

12. Ban stock buybacks and eliminate tax deductibility of interest.

Tariffs and Immigration Restrictions

Ahmari argues that tariffs and immigration restrictions are necessary to push back on corporate power, which has been used for decades to control the flows of goods and labor. Tariffs could help conservatives wrest back control over the flow of goods, while immigration restrictions could help them win back control of the labor flow — to the ultimate benefit of American workers.

Ahmari would like to see the economy regulated under a national industrial policy — a government effort to steer the direction of the economy, which has long been anathema to free-market conservatives. “Building stuff matters,” Ahmari says. “We’ve learned since the Ukraine war and the pandemic that you can’t just have a services economy. If we can’t manufacture artillery shells and masks and ventilators, we’re vulnerable.”

A Shifting Tide

Oren Cass, founder of the populist economic think tank American Compass, says this new agenda is more than just a policy framework — it’s part of a seismic demographic shift underway in the GOP. Cass argues that a generational changing of the guard is occurring inside the Republican Party — led by a small set of young, ambitious Republican senators: J.D. Vance of Ohio, Marco Rubio of Florida, Josh Hawley of Missouri, and Tom Cotton of Arkansas.

The generational shift among elected officials, Cass tells me, is also reflected in the congressional staffers, policy wonks, and media people who form the base of the conservative movement in Washington. “When you look at people 25 to 40 years old, all of the most motivated, competent, promising people across the right of center are going in this direction,” Cass said. “As invisible as this may be to the CNBC audience, if you are at a happy hour in DC, this has already happened.”

Allies and Critics

Cass counts among his allies several well-respected conservative economic thinkers. In Trump’s orbit, this includes former United States Trade Representative Robert Lighthizer, who joined the board of American Compass in 2021. Lighthizer would be expected to take a leading role in crafting a Trump second-term economic policy if the presumptive Republican nominee is elected in November.

Skepticism and Criticism

James Pethokoukis, a senior fellow at the conservative American Enterprise Institute and a proponent of the old-school Reaganite consensus economic policies, is skeptical of this new movement. “I am deeply skeptical of that entire movement because it’s fundamentally based on being reactive to your voters rather than trying to come up with good policy,” Pethokoukis told me in a recent interview. “It’s economic policy that emerges not from good economics but from politics and the culture war and what your base wants,” he said.

One of the sharpest critiques of this Trumpian neopopulism by traditional conservatives is that its policies are often inflationary. At a time when high inflation has taken a significant political toll on Democratic President Joe Biden — making voters essentially blind to what is otherwise a strong economy — any effort that could increase costs for consumers is likely to be viewed as politically dangerous.

Unlikely Allies

The new Trump-fueled populists on the right are finding common cause with economic populists on the left. They find common ground with the Biden administration on a range of issues, from industrial policy efforts like the infrastructure bill (which they see as directionally healthy) and the CHIPS Act spending on the semiconductor industry. They also appreciate Biden’s focus on antitrust enforcement, particularly against Big Tech companies, and the move to eliminate private sector non-compete agreements.

Ahmari calls himself a “Khan-servative,” in tribute to Lina Khan, Biden’s Federal Trade Commission chair and a leader of the left’s thinking on antitrust issues. This leads to a Venn diagram politics, in which populists from the left and right could team up on specific issues, offering a potential change for voters exhausted by political gridlock and ideological divisions.

Legislative Collaboration

In March, Vance partnered with liberal Rhode Island Democratic Sen. Sheldon Whitehouse to introduce the “Stop Subsidizing Giant Mergers Act,” which would end tax-free mergers and taxpayer subsidies that they see as consolidating corporate power. In February, Vance praised FTC’s Lina Khan, highlighting the potential for bipartisan collaboration in addressing corporate monopolies.

Conclusion

The rise of conservative economic populism within the GOP marks a significant shift in American politics. Led by figures like Sohrab Ahmari and Oren Cass, this movement seeks to redefine the party's economic policies to better serve the needs of downscale America. By embracing unions, advocating for higher wages, and pushing back against corporate power, these populists aim to build a more stable and equitable economy. As this new strain of populism gains traction, it promises to reshape the Republican Party and the broader political landscape for years to come.