In this “Big Question” feature of Project Syndicate, five us were asked to address this burning issue: Does Trumponomics represent a rejection of neoliberalism or its natural progression, and how might it reshape the US economy? My response follows, along with brief summaries of the others. A complete version of the discussion can be found here.
Stephen Roach. I hesitate to put a label on Trump’s deal-driven, transactional approach to economic policy. Targeted actions in support of Intel and MP Materials, revenue-sharing arrangements with Nvidia and AMD, along with sweetheart tariff exemptions for Apple and TSMC, are only the tip of Trump’s interventionist iceberg. In a sense, these latest initiatives are a sequel to his predecessor Joe Biden’s industrial policies, which included direct support for infrastructure, semiconductors and related sciences, and alternative-energy technologies.
These actions, as well as earlier industrial policies in Japan and Europe, fall well short of China’s approach, which draws on the country’s surplus domestic saving to target industries of the future. And it marshals the full resources of the state-planning apparatus (the National Development and Reform Commission), together with state-owned enterprises, state-directed banks, and state-supported investment funds.
Chinese industrial policy not only reflects the cumulative legacy of five-year plans that date back to the early 1950s – all of which rely, to some extent, on industry targets. It also embodies a series of sector-specific efforts, including Made in China 2025 (launched in 2015), the Internet Action Plan (2015), and two AI plans — the New Generation AI Development Plan (2017) and the recent AI-Plus Plan (2025). China’s strategic, comprehensive “all-of government” industrial policies are in a league of their own.
By contrast, there is no overarching strategy behind Trump’s transactional efforts. Moreover, the scope of such interventions will be limited by a US economy that is short on domestic savings, even more so with big, far-from-beautiful chronic federal budget deficits. And in an era of Sinophobia, there is strong political distaste for Chinese-style market-based socialism. Meanwhile, with federal spending for basic research under intense pressure, America is at risk of destroying its own innovation capabilities. Notwithstanding MAGA bluster, Trumponomics does little to address long-term US competitiveness.
Harold James (Princeton). As the US adopts capitalism “with Chinese characteristics,” and the Chinese Politburo issues stern warnings about a destructive form of competition that it calls “involution,” the two economic superpowers look increasingly similar. However, as demands for justice, transparency, and efficiency grow louder, classical liberalism will make a comeback. Just don’t call it neoliberalism.
Michael R. Strain (American Enterprise Institute). Trump is unthoughtfully, unstrategically, and opportunistically trying to “get” what he incorrectly believes are “great deals.” Ultimately, the broad bipartisan consensus in favor of liberalism became a consensus because it succeeded – and that success will help to ensure its longevity.
Antara Haldar (Cambridge University). Trumponomics has eschewed the quietly overbearing “Nanny State” that free-market ideologues decry in favor of a commanding, patriarchal “Daddy State.” While a paternalistic capitalism can deliver short-term bursts of growth, these often come at the cost of long-term dynamism.
Mariana Mazzucato (University College London). Trump’s “industrial policies” do not come anywhere close to meeting a standard definition of this concept. There is no plan, no alignment of institutions, no investment in capabilities. This will result not in transformation, but in chaos, with the state increasingly captured by narrow interests. Ironically, Trump’s “model” will lead to wage stagnation, deindustrialization, and increasing wealth concentration – precisely the trends that fueled the public anger that brought him to power.