OPINION:
The midterm elections are a referendum on the Trump presidency.
President Trump has delivered on some promises: deregulation and reining in diversity, equity and inclusion, but on key economic issues, his tariffs, tough immigration policies and muscular foreign policy have backfired.
During the first Trump presidency and the Biden administration, the economy grew about 2.5% a year. During Mr. Trump’s second term, it is barely 2%.
That does not sound like much of a difference, but with the recent boost to productivity from artificial intelligence, the economy should be delivering 3% to 3.5%.
Mr. Trump’s tariffs have stifled investment and slowed job creation.
Excessively high tariffs on materials such as metals and semiconductors have raised the cost of manufacturing automobiles and other products, and of building new factories outside AI-supporting sectors, to prohibitive levels.
Tariffs on materials and components from Mexico and Canada alone add $1,600 to the cost of each car made in the United States. Ford is paying about $2 billion a year in tariffs.
Those translate into higher sticker prices and new car sales falling to about 16 million units a year from 17 million before COVID-19.
Mitchell Metal Products in Wisconsin planned to invest in robotic welders and other automated assembly equipment. A similar expansion cost $727,000 in 2018, and the company estimated the price in 2026 would be $1.2 million.
Soaring costs for building materials, higher interest rates and labor shortages pushed the lowest bid to $2.1 million, which was cost-prohibitive.
Ohio-based Universal Metal Products planned a similar project in McAllen, Texas, but confronted the same realities.
Since January 2025, manufacturing employment has been down by 62,000, and by 11,000 in motor vehicles and parts.
In September 2023, unemployment was 3.7%, but over the next 15 months, the Biden economy added 127,000 jobs a month.
Since Mr. Trump returned, monthly growth has slipped to 40,000, even with an AI data center boom.
Part of that is tariffs, but new restrictions on legal immigration and rising petroleum prices resulting from the war with Iran are culprits too.
Talented young people abroad are less inclined to build lives in America and contribute to its innovation culture.
Unless reversed by the next president, those policies, coupled with a declining birth rate, threaten to shrink the U.S. workforce and productivity growth.
Where U.S. Immigration and Customs Enforcement deportations have been most aggressive, employment has gone down among American men without a college education.
Since January 2025, average wages are up 5.3%, but consumer prices have risen 4.8% — a snail’s pace of progress for real wages.
Some folks are doing exceedingly well — more Americans are breaking into the upper middle class — but many others are not as fortunate as those averages imply.
Even if Mr. Trump successfully ends the conflict with Iran and can guarantee safe passage through the Strait of Hormuz, gasoline prices are not coming down to prewar levels, short of a deep recession.
Buffers such as the national government’s petroleum reserves and industry stockpiles are deeply exhausted.
In the longer term, businesses and governments are mitigating risks by diversifying petroleum sources, a costly process.
The grievances to which democratic socialists are playing are not very different from those Mr. Trump exploited to win in 2024 (“The system isn’t fair”).
This administration’s bogeymen are foreigners — exploitative exporters and immigrants debasing American culture.
Yet the progressives are protectionists and have prejudices too. They like high tariffs, do not like Israel and do not offer immigration reforms that would meet the needs of a growing nation. They would throw the gates open by shutting down ICE.
For now, the economy grows at 2% — remarkable compared with many other developed countries — but not the 3% to 3.5% that is possible.
That would support rising real wages and less domestic discontent for socialists to exploit.
It would generate additional revenue to pull down our dangerously large and growing federal deficit, shore up the military and put Social Security on a sounder footing.
Prediction market platform Kalshi puts the odds of Democrats retaking the House at nearly 85%, but progressives should not count on a huge majority.
This would give incumbent democratic socialists such as Reps. Alexandria Ocasio-Cortez of New York and Rashida Tlaib of Michigan considerable leverage to shape the debate in the Democratic caucus and public square. That is especially so if several of the insurgent socialists who won recent primaries are also elected.
Their energy will shape the conversation leading up to the 2028 presidential campaign, with the possibility of a face-off between isolationists from the left and right.
The issues will be immigration and tariffs, regulating and taxing AI, villainizing the big corporations and expropriating wealth.
America is at a crossroads.
Do we build sensible bridges with our neighbors and friends, embrace the technologies that can power us to new prosperity and reward self-reliance and entrepreneurship?
Historically, those have been engines for American success.
Mr. Trump’s bungled presidency leaves the nation vulnerable to the possibility that someone such as Ms. Ocasio-Cortez will prevail and answer those questions badly.
• Peter Morici is an economist and emeritus business professor at the University of Maryland and a national columnist.
Follow the author
Please read our comment policy before commenting.