OPINION:
Practical constraints require that a new administration implement programs that complement but do not necessarily replicate its campaign promises.
It’s paramount that President-elect Donald Trump prioritize what can be accomplished in the first 21 months. Presidents’ political parties generally lose more House seats in midterm elections than the Republicans’ current narrow majority.
With the budget deficit at about 7% of gross domestic product, he should essentially renew the 2017 federal tax overhaul, with some embellishments for tips and overtime pay.
Corporate tax cuts aren’t necessary — factoring in state taxes, the 25.8% U.S. rate is about average for industrialized countries and lower than in Japan or Germany.
Going beyond that would likely drive up the 10-year Treasury rate, which provides the benchmark for mortgage rates.
Even though the Federal Reserve has cut short-term rates, the 10-year rate has risen. Combating that trend would require printing lots of money and inflation, inspiring a midterm election disaster for Republicans and rendering Mr. Trump a crippled lame duck.
Sealing the southern border is essential, but so is a measured approach to deportation and revisiting immigration reform.
The U.S. economy has grown at a 2.5% pace since 2016, thanks to Mr. Trump’s tax cuts, President Biden’s infrastructure and industrial policies and illegal immigrants joining the workforce.
Pruning waste — such as the electric vehicle tax credit — and immigration reform, which, by imposing large enough entry fees paid by sponsors, could be structured in raising revenue, could fit into a reconciliation package. The latter should curb “chain immigration” and better prioritize needed skills.
Elon Musk has novel ideas about suspending enforcement of many federal regulations because recent Supreme Court rulings make many federal rules unconstitutional — particularly West Virginia v. Environmental Protection Agency (2022), which said federal agencies cannot impose regulations that resolve major policy questions without congressional authorization, and Loper Bright v. Raimondo (2024), which limited the discretion of federal regulatory agencies where laws are vague.
Corporate executives would be nuts to stop adhering to those rules because the next Democratic administration and ultimately the courts may come to different conclusions. That could leave them with substantial civil liabilities.
The new administration can count on court challenges to the Musk approach. Mostly, it should pursue the arduous process of rewriting rules, vetting those through public comment and accomplishing what it can.
Treasury Secretary-designate Scott Bessent has talked about a layered approach to tariffs — leveraging those to obtain the policy responses desired from foreign governments.
Mr. Trump has threatened Canada and Mexico with a 25% tariff to obtain cooperation on border enforcement, addressing illegal drug trafficking and trade with China.
Since Canada is already closely aligned with us, threatening Ottawa is dumb.
Chinese manufacturers may be eyeing Mexico as a platform to circumvent any U.S. tariffs, and it should be encouraged to interdict migrants from entering and then passing through to our border.
The temptation is always present for a new administration to negotiate with China in hopes of changing its behavior. But the Obama, Biden and Trump 1.0 administrations got little out of talking with Beijing, and the circumstances are quite different now.
With its economy reeling from a property sector meltdown, it’s dumping as many manufacturers as it can onto global markets to stabilize it. It has more leverage nowadays because it is a dominant supplier of rare earth minerals critical in the production of armaments, electronics of all kinds, green energy equipment, automotive battery technology and many other products.
Weakening U.S., European and other allies’ manufacturing sectors and broader economies with a flood of exports fits China’s wider strategy — with axis members Russia, North Korea and Iran — to diminish American global influence and make the world safer for autocrats.
Imposing a 60% tariff could raise consumer prices by 1.2% over the phase-in period, but we should not aid the economy of a belligerent state by providing a market for its products.
That adds resources for China’s military buildup and will likely cost more than we save on cheap consumer goods. To counter the axis, we need to boost defense spending by 2% of GDP.
The manufacturing and high-tech industries of Chinese mercantilism most harms undertake the most research and development, and their lost sales slow U.S. growth.
We can apply those tariffs to products made by Chinese enterprises in Europe, Mexico and elsewhere and to the Chinese content of products imported from third countries.
That would be a great use of Mr. Bessent’s layering — inspiring those nations to impose policies like ours toward China.
Instead of losing the opportunity offered by the mandate from the trifecta in the recent election, the Trump administration should immediately impose a 20% tariff and an added 20% each year to give businesses and consumers time to adjust.
• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.
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