Trump's Dramatic Crossroads Between Protectionism and Dynamism

A popular meme depicts a road diverging. In one direction is a many-towered palace glistening in the sunshine. In the other is a crumbling castle beset by storm clouds and eerie purple lightning. The point of the image, known as "Dramatic Crossroads," is not hard to apprehend: A single starting point can lead to very different outcomes depending on the path one chooses.

At the start of President Donald Trump's second term, two unusually distinct possibilities await, and skirmishing has already begun between proponents of the two visions. Trump seems to find each appealing in its own way, so it's hard to guess which path the new administration is more likely to take.

In a surprisingly thoughtful keynote speech at last summer's National Conservatism Conference, Vivek Ramaswamy took a stab at clarifying the situation. The entrepreneur and onetime presidential candidate drew a distinction between the "national protectionist" and "national libertarian" wings of the ascendant American right. According to Ramaswamy, both options are nationalist in that they try to put America's national interests ahead of other considerations. (This he contrasted with the "neoliberal" consensus of the 1990s and early 2000s, which supposedly prioritized economic growth at the expense of national security and national unity.) "I think it's been decided, as obviously as it possibly can be, that America First is the future direction of the Republican Party," he told me the day after his speech. "From where I sit, the most important debate for the country to have is the intra–Republican Party and even intra–America First debate" about how best to advance the American cause.

That's as useful a way as any to conceptualize the crossroads facing the GOP and the country. The (national) protectionist path sees free trade and immigration as threats to Americans' well-being, and it sees the federal administrative state as a weapon conservatives can and should use to reward their friends and punish their enemies. The (national) libertarian alternative sees trade as positive except where national security is narrowly at issue, welcomes foreigners as long as they're willing to work hard and embrace America's civic ideals, and wants to shrink the administrative state so that conservatives' enemies can no longer wield it against their friends or anyone else.

The two visions imply meaningfully different approaches to public policy. Take trade. A national protectionist aims to stop cheap foreign goods from undercutting domestic producers; he wants Americans to buy American, even if it costs more, because those purchases will support jobs on the homefront. That would make all imports troubling—T-shirts as well as technology, from Canada as well as from China. A national libertarian, in contrast, cares about eliminating dependence on China only in what Ramaswamy called "critical sectors for U.S. security": military equipment and pharmaceuticals. Moreover, he recognizes that "if we're really serious about decoupling from China in those critical sectors, that actually means more, not less, trade with allies like Japan, South Korea, India, Vietnam." Stopping Americans from buying fruit from Peru or cars from Germany makes consumers worse off, and it doesn't do anything to address concerns that our top geopolitical adversary could control our access to lifesaving drugs. (How serious a concern that ought to be is a separate question.)

Until recently, Trump has been treated as a dyed-in-the-wool protectionist. But at the tail end of the 2024 campaign, he and those around him began to make recognizably libertarian noises. Now, as he begins the difficult task of assembling a governing agenda, two paths lie before him. One leads toward dynamism, the other toward stagnation. The future of American prosperity depends in no small part upon the choices he and his party will make.

DOGE Days

You may be wondering how different these options really are. While neither will align perfectly with a typical Reason subscriber's preferences, even a MAGA-inflected libertarian agenda could represent a major improvement over the left's militant progressivism or the "muscular" conservatism advocated in recent years by the so-called New Right. As evidence, witness the leading protectionists' indignant reactions to some of these recent developments.

Oren Cass is often considered the top policy wonk pushing right-wing economic nationalism. A former adviser to presidential hopeful Mitt Romney, Cass in 2020 launched American Compass, a think tank "dedicated to helping American conservatism recover from its chronic case of market fundamentalism." Since then, he and other nationalist conservatives have endorsed a host of government interventions historically associated with the Democratic rather than the Republican Party, from industrial policy to labor regulations to family subsidies to tariffs. The Cass agenda is explicitly protectionist, seeking to shield American workers from foreign competition and to prop up the domestic manufacturing sector with taxpayer dollars.

For years, both the mainstream media and right-wingers online have treated this as the only plausible future for the GOP. The debut of national libertarianism upended that presumption, and Cass was none too pleased. Days after the election, he began lambasting Ramaswamy's ideas as "warmed-over market fundamentalism with a dash of nationalism sprinkled on to mask that past-the-expiration-date funk." His resentment at being overshadowed at what should have been a moment of triumph for nationalist conservatism was almost tangible. Yet his complaint that national libertarianism lacked popular support ("Who, besides Vivek Ramaswamy, is a National Libertarian?" he asked) was belied by the excitement around the idea of slashing government emanating from many of Trump's own supporters. "Vivek's 'National Libertarianism' is much closer to the coalition's center of gravity than NatCon-style communitarianism," responded a contributor to Cass' own website, Samuel Hammond.

It was around this time that Trump announced he was tapping Ramaswamy himself, along with Tesla and SpaceX chief Elon Musk, to head the whimsically named Department of Government Efficiency (DOGE), an advisory commission tasked with streamlining the federal government by rooting out waste, fraud, and abuse; rolling back intrusive regulations; and perhaps even "deleting" unneeded agencies. "We are assisting the Trump transition team to identify and hire a lean team of small-government crusaders, including some of the sharpest technical and legal minds in America," the pair wrote in a November op-ed for The Wall Street Journal. This was by no means the last word on the administration's agenda—indeed, Ramaswamy's tenure with DOGE would turn out to be short-lived—but it made it clear that the political momentum was no longer running full-speed in a protectionist direction.

Marc Andreessen, another Silicon Valley entrepreneur, volunteered his services as well. "In the two months since Trump's election, Andreessen has been leveraging the hiring skills he honed scaling start-ups to help build the Trump administration during frequent visits to the president-elect's Mar-a-Lago Club in Florida," The Washington Post reported in January.

According to Andreessen, his break from the Democratic Party came after officials in the Biden administration made it clear they intended to regulate the crypto and artificial intelligence sectors into the ground. In a January podcast with The New York Times' Ross Douthat, he described a meeting in which White House senior staff told him and his business partner, Ben Horowitz, "This whole thing where you guys think you can just start companies and write code and release code on the internet—those days are over."

"That's the day we walked out and stood in the parking lot of the West Wing and took one look at each other and were like, 'Yep, we're for Trump,'" Andreessen said. Even knowing that the MAGA coalition contains its own share of tech skeptics, he added, "I'm 100 percent certain it's going to be better than what we've been dealing with."

H-1Betrayal

National libertarianism's appeal to this president should not come as that much of a surprise. A big part of his selling proposition is that under Trump, America will start to win again. We'll be winning so much, you'll get tired of winning! We're going to win like never before! And like the emerging "tech right"—but unlike national protectionist types—libertarians have always been fundamentally bullish about what human beings can accomplish if the government would only get out of the way and let them shoot the moon.

In his conversations with the Trump transition team, Andreessen explained, "the high-level thing they say with respect to anything involving tech or business is, 'We want America to win.' What that means is we want America to be the preeminent country in the world. We want America to be the global economic leader….We want to make sure that American technology proliferates globally and not Chinese technology." But as libertarians understand, that vision requires unleashing American innovation, not stymieing it with regulations or coddling it with subsidies. It means opening foreign markets to our companies, not walling off the American economy from the rest of the planet.

At the end of the day, protectionism is rooted in fear and pessimism: fear that we'll be outcompeted, and pessimism about the idea that a growing, dynamic economy can make us all better off. Libertarians are fond of making just such claims—so fond that Cass coined a term to mock us for it. Instead of tussling over the size of different constituencies' relative shares of the fixed economic pie, the libertarian view is that our goal should be to grow the pie so everyone's share is bigger. Cass calls this "economic piety," and he rejects it. For him, the goal is not to grow the economy; it's to direct the economy for the benefit of deserving constituencies such as blue-collar workers.

This is pure zero-sum thinking. It cements in place a mindset where one group's gains necessarily come at some other group's expense. To libertarians, technological innovation is a boon because it makes the whole economy more productive and everyone richer in the long run. But some people usually are hurt in the short run—think of the proverbial buggy-whip salesmen when automobiles come along. Protectionists are inclined to be suspicious of the tech sector and sympathetic toward policies that would tamp down economic dynamism in the name of protecting the would-be losers. The result, inevitably, is stagnation.

In December, the uneasy coexistence of New Right and tech right within the Trump coalition broke open after Ramaswamy posted a missive on X complaining that the culture in America "venerate[s] mediocrity over excellence." The result is a dearth of math and science skills, he said, which forces tech companies to bring in talent from abroad.

While most Republican politicians have long insisted that only illegal immigration is a problem, national protectionists à la Steve Bannon object to all immigration as undercutting the wages of native-born workers (and perhaps also sullying American bloodlines). Thus, computer programmers who come to the U.S. on H-1B visas are just as suspect as Central American refugees who slip by night across the southern border—more so, in the view of certain New Right social media accounts, since they take high-paying jobs that rightfully belong to white American men.

On this issue, Trump's longstanding antipathy toward migrants from "shithole countries" crashes into his desire to see American companies win on the global stage. Bannon has tried to brand the H-1B program as a "total and complete scam" and Musk et al. as "truly evil" and "sociopathic overlords" for supporting it. But those who have tried to run enterprises in Silicon Valley know that part of winning is recruiting the best and brightest, regardless of where they happened to be born—a point highlighted by libertarians and downplayed by protectionists during the great immigration fracas of Christmas 2024.

In the end, Trump appeared to side with tech, declaring that "I've been a believer in H-1B" and "it's a great program." New Right accounts exploded with outrage at the supposed betrayal, but the American people didn't seem to mind. Trump's favorability ratings continued to tick upward, approaching record highs before Inauguration Day, according to the FiveThirtyEight poll aggregator.

NatConfused

Still, there are abundant reasons to be skeptical about the staying power of this (national) libertarian moment. On the one hand, Trump has proved himself to be a savvy intuiter of public opinion. In the immediate aftermath of an election in which voters named inflation as a top issue, he surely recognizes that people are not likely to react kindly to policies that drive up the price of goods. That realization may have had something to do with the conspicuous absence of tariffs from his flurry of Day 1 executive orders (and the speed with which he negotiated a delay of threatened tariffs against Mexico and Canada).

On the other hand, as Cass and Co. are learning the hard way, anyone who thinks this president can be counted on to faithfully execute a coherent ideological agenda is deluded. What's more, to the extent that Trump does have persistent commitments, they have for decades run in the direction of hostility to both global integration and the rule of law. Some of the executive orders that were issued the first day—one of which reportedly stopped Afghan refugees, including family members of active-duty U.S. military personnel and people who risked their lives by assisting America against the Taliban, from boarding planes to the United States—should be a sobering reminder of that fact.

The tech right is hardly populated by principled free marketers either. As entrepreneurs, they may object to the stranglehold that Democrats have tried to put on their business model, but they generally have no qualms about benefiting from the public fisc: According to Politico, SpaceX and Tesla alone have received more than $15 billion in federal contracts. It's eyebrow-raising as well that many Silicon Valley founders and funders swim in the same water as people such as the "neoreactionary" blogger Curtis Yarvin, who has said that Americans need to "get over their dictator-phobia." (Newly minted Vice President J.D. Vance—a venture capital alum with ties to both Musk and Ramaswamy—has favorably cited Yarvin's ideas and referred to him as a friend.) None of this should inspire confidence.

While the enthusiasm about shrinking the state is welcome, DOGE itself has always been a questionable proposition. The new administration has evinced zero appetite for cutting the entitlement programs that overwhelmingly drive federal insolvency, which means the government efficiency push at best will probably amount to tinkering around the edges of America's overspending problem.

Whether the new "department" will manage to competently push through even modest reforms without sparking a popular backlash against the very idea of limited government is also very much in doubt. Within minutes of Trump's swearing in, DOGE was facing lawsuits on procedural grounds. That same day, Ramaswamy announced he would not be helping to lead the effort after all—ostensibly because he wants to explore a run for Ohio governor, but allegedly because he antagonized too many people in the MAGA orbit with his vigorous defense of high-skilled immigration. And even libertarians are now warning that some of Trump's subsequent executive actions appear constitutionally dubious.

As always, Trump's mercurial nature is a towering obstacle to getting anything done. It certainly seems like only a matter of time before Musk, too, finds himself on the outs with the administration. Whither the government efficiency momentum then?

Nonetheless, the GOP faces a choice about how to move forward. The protectionist path will always be tempting because it means instant goodies for favored constituencies. But protectionism weakens not just the economy but the American spirit by telling people that their industries can't compete, that winning on the world stage is no longer a realistic goal, that concessionary redistribution rather than genuine abundance is the best they can dream of. Nationalist conservatives are confused if they think that is what voters were pulling the lever for in November. Most people aren't asking for a handout; they just want Washington to stop rigging the system against them so they can get on with their lives.

America's greatness has always stemmed from the energy and adventurousness of her citizens. As Trump himself put it in his second inaugural address, "Nothing will stand in our way, because we are Americans and the future is ours." Instead of retreating to our crumbling castle and pulling up the drawbridge, we should be moving with hope toward brighter days ahead.