Should Trump’s Trade War Collapse, Republican Populists Could Face Intense Scrutiny
Oren Cass is advocating for Trump's tariffs while stating that the administration should enhance its communication strategy.
TroibNews 
President Donald Trump’s aggressive approach to reshaping the global trade system reflects a long-held aspiration for the protectionist faction within the Republican Party that has often been sidelined. But what happens if this initiative fails dramatically?
Oren Cass, founder of the conservative think tank American Compass and a close associate of key figures in the administration like Vice President JD Vance and Secretary of State Marco Rubio, has much at stake in this endeavor. Cass stands as a notable advocate for Trump’s tariff strategy, likening the “Liberation Day” tariff announcement to D-Day, framing it as a bold initial strike in a prolonged campaign against the forces he believes have undermined the American economy. However, he has voiced concerns about Trump’s ability to persuade the public and businesses that the new trade barriers will yield positive outcomes, especially in light of significant market downturns. Amid ongoing market instability, Trump announced a temporary pause on some tariffs for 90 days.
“I don’t think there is a problem with doing things that have costs,” Cass remarked in an interview with PMG Magazine on Tuesday evening, shortly before what the White House labeled “Liberation Day.” “The problem is with failing to properly communicate the nexus between the problem to be solved and costs to be borne.”
Cass’s criticisms of free trade, coupled with his doubts about sweeping tax cuts, have positioned him against established conservative groups that have dominated the GOP agenda for years. He’s acutely aware that a poorly managed rollout of tariffs leading to economic disaster could result in a significant setback for his faction within the party.
“A plan done poorly that imposes politically unsustainable costs, and therefore loses favor with the public, obviously undermines the long-term goal of effecting this kind of change,” he explained.
This dialogue has been trimmed for brevity and clarity.
What have you made of the rollout so far?
On one hand, I've been incredibly encouraged by how they’ve prioritized this issue. The trend toward largely unrestricted globalization over the past generation hasn’t yielded the desired results, but reversing this trend does entail short-term costs. Historically, political leaders have been unwilling to confront this reality. Thus, it’s refreshing to see an administration that acknowledges the issue, aims to prioritize solutions, and communicates candidly about it.
On the flip side, the specific policies they’ve implemented have inflicted greater costs than necessary. With a strategy that incurs initial costs before realizing benefits, it’s crucial to minimize those costs substantively and politically while ensuring that the benefits are fully realized.
The immediate enforcement of all tariffs, the ambiguity regarding what is temporary versus permanent, and the unclear long-term vision—how to transition from the present situation to the desired endpoint—are significant challenges that pose serious risks to the initiative.
Given the ongoing negotiations, what’s your outlook on market reactions?
I’m more concerned about the long-term decisions that companies and countries are making in response than the immediate market reactions. I see two types of tariffs being deployed here. One is permanent tariffs intended to alter incentives for businesses to invest and produce in the U.S. However, to encourage significant capital investments—those that are viable only if they yield profits for years to come—companies must have confidence in long-term policy stability. Uncertainty hampers their ability to reap the anticipated benefits.
The other category consists of what I term “negotiating tariffs,” which are meant to be temporary and provide leverage over countries whose behaviors we seek to change. While these tariffs are intended to compel change rather than alter investment patterns, there remains significant uncertainty about what specific changes are expected.
Confusion exists within and between these categories due to conflicting messages from the administration regarding what is genuinely temporary.
Can you provide an example?
A prime illustration would be the tariffs on China. The existing tariffs on China were already quite high before the new retaliatory tariffs increased the overall figure beyond 100 percent.
The 60 percent tariffs on China were part of Trump’s campaign platform, as was the notion of revoking China's trade relation status. Even if some China tariffs fall into the reciprocal category, this suggests a lack of flexibility regarding negotiations.
During his first term, the administration sought very transactional agreements with China—such as making them commit to purchasing more soybeans. This time, however, the focus seems to be on achieving balanced trade and free markets, particularly with allies like Canada and Mexico, who are being encouraged to join efforts to exclude China.
This indicates a strategic shift toward decoupling from China rather than seeking cooperative terms for globalization. Yet, members of the administration still invoke language suggesting they are waiting for China to propose a deal.
This uncertainty presents a significant challenge for the industry, particularly for businesses considering shifting their supply chains. As the markets remain volatile, the longer this uncertainty persists, the greater the likelihood it will restrict businesses' ability to follow through on the administration’s objectives of building, investing, and hiring.
How long does the president have to demonstrate this approach could work?
I don’t entirely subscribe to the idea that stock market performance is a decisive factor in advancing the plan. Politically, it may become crucial if market turbulence creates sufficient pressure.
What are the stakes for pro-tariff and protectionist forces within the Republican Party?
Executing a poorly handled plan that burdens the public with unsustainable costs undermines the long-term aim of enacting such changes.
Reflecting on the experience of Ronald Reagan and Paul Volcker in the 1980s provides an interesting analogy. They communicated clearly about identifying problems and acknowledged the high short-term costs needed to resolve those issues, explaining how doing so would establish a stronger foundation for future economic growth. They did implement significantly high costs in terms of interest rates, unemployment, and recession before recovery began, yet Reagan won reelection by a historic margin.
I don’t believe there’s an issue with imposing costs. The key concern lies in failing to effectively convey the connection between the problem and the necessary costs as well as not providing a coherent pathway from problem to action to future outcome.
How could the administration improve its messaging, especially to the pro-free trade segment of the GOP?
That’s a good question. I’m unsure how influential truly committed free trade supporters are at this moment. One significant obstacle they face is their overall rejection of the entire project rather than merely opposing specific tactical strategies. They are often unwilling to engage constructively within today’s political landscape.
This detachment has been a recurring issue for libertarians who take strong principled stances while alienating themselves from those who could potentially support their ideas. This pattern seems to apply more broadly to many pro-globalization economists and segments of the business community as well.
There exists a potential for constructive engagement. For instance, organizations like the Chamber of Commerce or the Business Roundtable could effectively illustrate how certain companies are adversely affected by sudden tariffs, demonstrating that they would be inclined to invest more in the U.S. given some time to adapt.
However, when they assert that administration officials lack intelligence or are misguided, it signals they are distancing themselves from the broader coalition.
Yet, the administration hasn’t been very receptive to such input lately. Do you perceive any willingness to reach out to that segment of the Republican coalition?
I can’t accurately gauge what political calculations the administration might undertake. My sense is, however, that the current trajectory does not suggest a desire to extend olive branches to groups that have been openly critical and obstructive.
It’s more beneficial to consider what compelling approaches those entities could take to present their case. This would necessitate acknowledging the administration's goals as legitimate and tapping into areas where these groups can provide valuable insights.
Frequent vague references to “business uncertainty and disruption” often sound clichéd, creating a “cry wolf” problem when genuine policy challenges arise that genuinely threaten stability.
Have you experienced any backlash from opposing ideologues within the party regarding American Compass’ endorsement of these policies?
Those who oppose these initiatives and organizations like American Compass are intensifying their efforts to challenge them. However, I haven’t observed situations where organizations that once held a different perspective are now reassessing their stance.
Yet, there remains significant uncertainty. In the policy realm, this uncertainty doesn’t generate the same headlines or urgency as it does in financial markets or international relations. However, it does cause unease, prompting many to reevaluate their strategies moving forward.
If these policies fail to produce a revival in manufacturing or increases in wages, how do you envision the GOP coalition evolving as we approach 2024?
There are two potential scenarios. One is that the administration acknowledges that its approach is unsustainable and opts to retract its policies. The fallout from that would largely hinge on how the administration frames this decision and what steps it intends to take moving forward.
If the administration proclaims: “We’re abandoning this approach,” it would severely hinder the project’s continuity. Conversely, if they assert: “We’ve gleaned lessons and are preparing for our next attempt,” the initiative can continue.
Should the administration persist with its current strategy—especially if it incorporates necessary adjustments to mitigate costs and streamline progress—there could be additional time to determine outcomes. It takes years to construct a factory, after all.
The appropriate timeline for assessment is much like the time it took for Japanese companies to begin U.S. auto production or for the implementation of the CHIPS Act to yield new semiconductor capacity. The signs of investment often appear much sooner than the tangible economic benefits of those investments materialize.
Evaluating this policy will require looking over the next two to three years. Can the economy attain a new equilibrium that alleviates uncertainty? If investment does occur within that context, enthusiasm for the policies will likely flourish.
However, if uncertainty and instability persist—particularly if policy continues to shift or if, in a few years, investments remain stagnant or in decline—then a fair assessment would conclude that this endeavor was unsuccessful, warranting a reevaluation of its standing.
Navid Kalantari for TROIB News
Oren Cass, founder of the conservative think tank American Compass and a close associate of key figures in the administration like Vice President JD Vance and Secretary of State Marco Rubio, has much at stake in this endeavor. Cass stands as a notable advocate for Trump’s tariff strategy, likening the “Liberation Day” tariff announcement to D-Day, framing it as a bold initial strike in a prolonged campaign against the forces he believes have undermined the American economy. However, he has voiced concerns about Trump’s ability to persuade the public and businesses that the new trade barriers will yield positive outcomes, especially in light of significant market downturns. Amid ongoing market instability, Trump announced a temporary pause on some tariffs for 90 days.
“I don’t think there is a problem with doing things that have costs,” Cass remarked in an interview with PMG Magazine on Tuesday evening, shortly before what the White House labeled “Liberation Day.” “The problem is with failing to properly communicate the nexus between the problem to be solved and costs to be borne.”
Cass’s criticisms of free trade, coupled with his doubts about sweeping tax cuts, have positioned him against established conservative groups that have dominated the GOP agenda for years. He’s acutely aware that a poorly managed rollout of tariffs leading to economic disaster could result in a significant setback for his faction within the party.
“A plan done poorly that imposes politically unsustainable costs, and therefore loses favor with the public, obviously undermines the long-term goal of effecting this kind of change,” he explained.
This dialogue has been trimmed for brevity and clarity.
What have you made of the rollout so far?
On one hand, I've been incredibly encouraged by how they’ve prioritized this issue. The trend toward largely unrestricted globalization over the past generation hasn’t yielded the desired results, but reversing this trend does entail short-term costs. Historically, political leaders have been unwilling to confront this reality. Thus, it’s refreshing to see an administration that acknowledges the issue, aims to prioritize solutions, and communicates candidly about it.
On the flip side, the specific policies they’ve implemented have inflicted greater costs than necessary. With a strategy that incurs initial costs before realizing benefits, it’s crucial to minimize those costs substantively and politically while ensuring that the benefits are fully realized.
The immediate enforcement of all tariffs, the ambiguity regarding what is temporary versus permanent, and the unclear long-term vision—how to transition from the present situation to the desired endpoint—are significant challenges that pose serious risks to the initiative.
Given the ongoing negotiations, what’s your outlook on market reactions?
I’m more concerned about the long-term decisions that companies and countries are making in response than the immediate market reactions. I see two types of tariffs being deployed here. One is permanent tariffs intended to alter incentives for businesses to invest and produce in the U.S. However, to encourage significant capital investments—those that are viable only if they yield profits for years to come—companies must have confidence in long-term policy stability. Uncertainty hampers their ability to reap the anticipated benefits.
The other category consists of what I term “negotiating tariffs,” which are meant to be temporary and provide leverage over countries whose behaviors we seek to change. While these tariffs are intended to compel change rather than alter investment patterns, there remains significant uncertainty about what specific changes are expected.
Confusion exists within and between these categories due to conflicting messages from the administration regarding what is genuinely temporary.
Can you provide an example?
A prime illustration would be the tariffs on China. The existing tariffs on China were already quite high before the new retaliatory tariffs increased the overall figure beyond 100 percent.
The 60 percent tariffs on China were part of Trump’s campaign platform, as was the notion of revoking China's trade relation status. Even if some China tariffs fall into the reciprocal category, this suggests a lack of flexibility regarding negotiations.
During his first term, the administration sought very transactional agreements with China—such as making them commit to purchasing more soybeans. This time, however, the focus seems to be on achieving balanced trade and free markets, particularly with allies like Canada and Mexico, who are being encouraged to join efforts to exclude China.
This indicates a strategic shift toward decoupling from China rather than seeking cooperative terms for globalization. Yet, members of the administration still invoke language suggesting they are waiting for China to propose a deal.
This uncertainty presents a significant challenge for the industry, particularly for businesses considering shifting their supply chains. As the markets remain volatile, the longer this uncertainty persists, the greater the likelihood it will restrict businesses' ability to follow through on the administration’s objectives of building, investing, and hiring.
How long does the president have to demonstrate this approach could work?
I don’t entirely subscribe to the idea that stock market performance is a decisive factor in advancing the plan. Politically, it may become crucial if market turbulence creates sufficient pressure.
What are the stakes for pro-tariff and protectionist forces within the Republican Party?
Executing a poorly handled plan that burdens the public with unsustainable costs undermines the long-term aim of enacting such changes.
Reflecting on the experience of Ronald Reagan and Paul Volcker in the 1980s provides an interesting analogy. They communicated clearly about identifying problems and acknowledged the high short-term costs needed to resolve those issues, explaining how doing so would establish a stronger foundation for future economic growth. They did implement significantly high costs in terms of interest rates, unemployment, and recession before recovery began, yet Reagan won reelection by a historic margin.
I don’t believe there’s an issue with imposing costs. The key concern lies in failing to effectively convey the connection between the problem and the necessary costs as well as not providing a coherent pathway from problem to action to future outcome.
How could the administration improve its messaging, especially to the pro-free trade segment of the GOP?
That’s a good question. I’m unsure how influential truly committed free trade supporters are at this moment. One significant obstacle they face is their overall rejection of the entire project rather than merely opposing specific tactical strategies. They are often unwilling to engage constructively within today’s political landscape.
This detachment has been a recurring issue for libertarians who take strong principled stances while alienating themselves from those who could potentially support their ideas. This pattern seems to apply more broadly to many pro-globalization economists and segments of the business community as well.
There exists a potential for constructive engagement. For instance, organizations like the Chamber of Commerce or the Business Roundtable could effectively illustrate how certain companies are adversely affected by sudden tariffs, demonstrating that they would be inclined to invest more in the U.S. given some time to adapt.
However, when they assert that administration officials lack intelligence or are misguided, it signals they are distancing themselves from the broader coalition.
Yet, the administration hasn’t been very receptive to such input lately. Do you perceive any willingness to reach out to that segment of the Republican coalition?
I can’t accurately gauge what political calculations the administration might undertake. My sense is, however, that the current trajectory does not suggest a desire to extend olive branches to groups that have been openly critical and obstructive.
It’s more beneficial to consider what compelling approaches those entities could take to present their case. This would necessitate acknowledging the administration's goals as legitimate and tapping into areas where these groups can provide valuable insights.
Frequent vague references to “business uncertainty and disruption” often sound clichéd, creating a “cry wolf” problem when genuine policy challenges arise that genuinely threaten stability.
Have you experienced any backlash from opposing ideologues within the party regarding American Compass’ endorsement of these policies?
Those who oppose these initiatives and organizations like American Compass are intensifying their efforts to challenge them. However, I haven’t observed situations where organizations that once held a different perspective are now reassessing their stance.
Yet, there remains significant uncertainty. In the policy realm, this uncertainty doesn’t generate the same headlines or urgency as it does in financial markets or international relations. However, it does cause unease, prompting many to reevaluate their strategies moving forward.
If these policies fail to produce a revival in manufacturing or increases in wages, how do you envision the GOP coalition evolving as we approach 2024?
There are two potential scenarios. One is that the administration acknowledges that its approach is unsustainable and opts to retract its policies. The fallout from that would largely hinge on how the administration frames this decision and what steps it intends to take moving forward.
If the administration proclaims: “We’re abandoning this approach,” it would severely hinder the project’s continuity. Conversely, if they assert: “We’ve gleaned lessons and are preparing for our next attempt,” the initiative can continue.
Should the administration persist with its current strategy—especially if it incorporates necessary adjustments to mitigate costs and streamline progress—there could be additional time to determine outcomes. It takes years to construct a factory, after all.
The appropriate timeline for assessment is much like the time it took for Japanese companies to begin U.S. auto production or for the implementation of the CHIPS Act to yield new semiconductor capacity. The signs of investment often appear much sooner than the tangible economic benefits of those investments materialize.
Evaluating this policy will require looking over the next two to three years. Can the economy attain a new equilibrium that alleviates uncertainty? If investment does occur within that context, enthusiasm for the policies will likely flourish.
However, if uncertainty and instability persist—particularly if policy continues to shift or if, in a few years, investments remain stagnant or in decline—then a fair assessment would conclude that this endeavor was unsuccessful, warranting a reevaluation of its standing.
Navid Kalantari for TROIB News
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