President Trump is radically altering federal policy for promoting economic growth.
As Treasury Secretary Bessent explains, this has three components.
First, dismantle U.S. trade policies and international arrangements that prioritize globalization and weaken the middle class. Essentially, boost American manufacturing with high tariffs providing a pricing umbrella to attract domestic and foreign investment.
The average tariff on imports is now 19% as compared to 2.3% in 2024
While the final contours of the new international trade order and scope of foreign market access for U.S. exports are not yet in place—new trade agreements take years not months to implement—it’s unlikely that future presidents will return tariffs to pre-Trump 2.0 levels.
Trump’s successor for Federal Reserve Chairman Powell will be less focused on inflation and enable lower short-term interest rates. However, large federal deficits will frustrate efforts to boost manufacturing investment, because the 10-year Treasury rate, which provides a benchmark for long-term business borrowing, will likely remain elevated.
Second, Trump has moved aggressively, mostly through executive orders, to ease federal regulations. We can see that in the record crude oil production.
Finally, the One Big Beautiful Bill Act reinstated or made permanent several business friendly tax benefits related to the expensing of investments in new plant, equipment and R&D.
Although Trump’s approaches to monetary, trade and tax policies have prominent critics, the die is cast. We’d best consider what else is needed for his program—and those of future presidents—to work most effectively.
Critical will be the availability and skills of workers for factories and emerging high-tech industries.
American students’ competence in math and science lags students abroad, and grade-school performance in fundamentals like reading is eroding. Overall, adult American workers don’t stack up to foreign workers as well as they once did in general reasoning and problems solving skills.
We are dependent on immigration to fill about one-fifth of STEM positions, and over two-fifths of doctoral level science and engineering roles.
In public schools, we need better accountability and more emphasis on vocational education to staff new factories and the growing range of technician roles created by Artificial Intelligence and elsewhere in the tech sector.
The Department of Labor’s Apprenticeship USA connects recent high school graduates, the unemployed and others seeking to upgrade their career trajectories with paid apprenticeship programs. Recent graduates earn an average of $84,000 a year.
By better promoting these programs and through smarter immigration policies, the federal government could boost the availability of highly skilled workers.
In 2023 and 2024, GDP grew 2.8% annually, and the economy added 192,000 jobs a month. At full employment, indigenous population growth and regular legal immigration should have been able to support less than half that figure—the balance was mostly met by illegal immigrants taking jobs.
This year, growth is disrupted by uncertainty about tariffs and deportations.
If we are to accomplish better than 2% growth, we need more legal immigrants to fill STEM occupations and less-skilled positions in agriculture and food processing, construction, elder and childcare and other services.
The laws enabling legal immigration are overly biased toward family reunification, which can be abused through chain immigration, and a diversity lottery, which is at odds with the movement toward making workforce decisions on the basis of competence and accomplishment.
We should adjust legal immigration quotas to ensure 1 to 1.5 million additional workers a year, and Trump could draw on growing public sentiment to reshape immigration policies.
Federal authorities could be empowered to screen applicants, as Canada does, for their potential contribution to the economy and prioritize those who fill needed occupations. However, such a process could easily be corrupted by the cultural agenda of a future administration.
Instead, let the market decide who can contribute most by setting annual quotas that would permit enough new workers to sustain unemployment at about 4% a year.
Let employers sponsor workers but pay fees set by auction and use the proceeds to assist local governments with resettlement costs.
Employers should be required to guarantee work for a minimum of a year or two to prevent churning and quota farming.
Raising the cost to employers of immigrant workers through auctioned licenses would greatly reduce employer incentives to hire immigrants to avoid paying higher wages to both native-born Americans and established Green Card holders.
Stronger immigration-enabled growth would boost tax receipts and better secure Americans’ retirements directly by adding to the Social Security trust funds and indirectly by reducing federal deficits. That latter would help lower interest rates, boost business profitability and stock market valuations, and those would further enhance the value of retirement savings accounts.
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Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.