Optimism but not confidence as Trump takes control

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The author is an FT contributing editor, chief economist for American Compass and writes the Understanding America newsletter.

Washington was full of optimism this weekend, but not confidence. At receptions and galas where gossip is prime currency, and at podcasts where everyone sells their own spin, positivity reigns. “Trump really has a chance . . . ” people said. “There’s a lot of upside.”

It’s undoubtedly a “vibe shift,” as the commentary suggests, especially when contrasted with the senescent presidency slowly and painfully winding down. The return of a president who can do anything at all would be a major upgrade by default. But the vast scope of the reformed regime to deliver a new “golden age,” as the Trump team likes to put it, is not matched by any certainty about how his administration will proceed.

Everyone wants to talk about artificial intelligence, for example—though less because of excitement about superintelligence than because of the more mundane potential for increased productivity. The problem is that improving the models and expanding their capabilities for widespread application will require Herculean infrastructure investments in a barely reasonable timeline.

In one possible world, Donald Trump and his team focus on building their economic agenda: rapidly developing natural resources, expanding infrastructure, subsidizing investment and training the workforce. That would make the most sense, but it’s not something they’ve talked about much. Trump himself is more likely to focus his enthusiasm on cryptocurrency, while high-profile supporters like Elon Musk and Vivek Ramaswamy have spent much of their energy criticizing American culture and calling for more foreign activists.

Similarly, decoupling the American and Chinese economies has become crucial, and Trump has signaled his support for it in the Republican Party platform, including a call to withdraw China’s “permanent normal trade relationship” status. Yet despite issuing an executive order in 2020 to ban TikTok, he is now recasting himself as its savior. A law that required the parent company, ByteDance, to move the service to an American firm or shut it down by January 19, the day the platform went dark. Users received a notice saying the company looks forward to working with Trump to reinstate it. And Trump now says he will do just that. In response, ByteDance brought TikTok back online to the delight of users.

Is Trump determined to reverse China’s hawkish globalization mistakes, even if Americans feel some pain as they crawl back from the hole they dug themselves? Or is he more interested in scoring points as a president who defended TikTok after his predecessor?

There are countless similar questions. Will the fight over the Tax Cuts and Jobs Act of 2017 dominate the legislative calendar for the first year? Will the government adopt humanitarian strategies to deport illegal immigrants to secure public support for the move, or proceed in ways designed to backfire and polarize?

Will the administration relish the attack on the excesses of the higher education system, or work equally hard to create useful new non-college pathways to good jobs? Will the “Department of Government Efficiency” focus on government efficiency or continue to muddle beyond its purview?

The basis for optimism lies in the quality of Trump’s senior appointments, which represent a marked improvement over his first-term choices. If administration discipline and execution travel the distance from a Mike Pence to a JD Vance, a Rex Tillerson to a Marco Rubio, or a Susie Wiles to a Reince Priebus, then a new golden age may indeed be upon us.

Whereas in 2016 Trump outran a supply line of supporting institutions, ideas and personnel, he can now draw from a deep bench of talent and a thick playbook aligned with his own priorities. Across agencies and White House offices, he’s quietly stocking his teams with serious players.

But the team’s captain, coach and quarterback is still Trump himself. Not many people bet well on the decisions he’ll make in the Oval Office, especially when predicting he’ll do what conventional analysis suggests. The fruit is big and juicy and hanging lower than ever and now everyone is waiting to see what he will pick.