The Post-Pandemic Realignment Is Here
Trade rebounds, GDP accelerates, and the middle class redraws its political map
A quiet but consequential shift is unfolding beneath the surface of American economic and political life. In April, the U.S. posted its largest monthly trade deficit drop on record, as imports plunged by $68.4 billion and exports climbed to an all-time high of $188.5 billion. This narrowing of the goods trade gap — now at its smallest since September 2023 — may seem like a footnote. It isn’t.
The implications ripple directly into the GDP outlook. The Atlanta Fed’s GDPNow model boosted its Q2 growth estimate from 3.8% to 4.6% this week, with net exports, often a drag, now pulling their weight. That’s not just a forecast upgrade. It’s a signal that the post-COVID economy is not simply drifting. It’s moving, and moving fast.
The Tariff Debate Reignites
This turnaround also reopens a debate that’s long since outgrown the textbooks. Are tariffs self-defeating taxes that distort markets, or are they strategic levers of economic statecraft?
Classical economists argue that tariffs raise prices, reduce consumer surplus, and misallocate resources. That’s true — in theory. But in practice, the story has become more complex.
Trump-era tariffs, now partially revived and expanded, didn’t crash the economy or ignite runaway inflation. Instead, they exposed a truth that economic orthodoxy often misses: when applied in targeted, time-bound ways, tariffs can shift the chessboard.
Imports fell more sharply than exports. The trade deficit narrowed. Key industries gained breathing room from cheap foreign competition. And many firms absorbed the cost not by passing it on to consumers, but by cutting margins or reorganizing supply chains.
Trump’s approach defied the textbook because the textbook assumed a different world — one without global overcapacity, adaptive logistics, a soft Fed, and inflation fatigue. Whether you call it protectionism or bargaining, the policy functioned less as a wall and more as a lever.
Growth Ahead But Who Gets the Credit?
That lever may now be contributing to stronger output. But will it translate into political capital?
Trump’s approval ratings remain stubbornly steady. Our own Quantus polling in May (two polls) showed him dead-even: 48% approve, 48% disapprove. New data this week confirms the trend:
Zogby: 48% / 49%
Fabrizio Ward: 46% / 49%
ActiVote: 46.3% / 50.2%
Rasmussen: +7
Atlas Intel: –9
The variation reflects methodology and polarization. Trump’s support is both narrow and durable, a ceiling and a floor pressed close together. It’s unlikely to collapse. It’s just as unlikely to rise meaningfully without help.
That help might come from the economy.
The Economic Card and Its Voters
CNN and IPSOS polling now shows Republicans with a double-digit lead over Democrats on handling the economy, a figure that would have been unthinkable a decade ago. More startling is the political realignment among the middle class:
In 1989, Democrats held a 23-point edge with middle-income voters.
By 2022, that had narrowed to 4.
In 2025: it’s tied.
This is the quiet reshaping of American politics, not a red wave, but a rebalancing. Not a populist revolt, but a pocketbook pivot.
Add to that a forecast from FORTUNE that U.S. manufacturing may add 3.8 million jobs by 2033 — nearly four times the number added from 2013 to 2023. But there’s a catch: up to 2 million of those jobs could go unfilled due to skill shortages.
This is where policy meets possibility in trade schools, apprenticeship programs, workforce development initiatives. It’s not just about bringing jobs back. It’s about preparing people to take them.
The Road to 2026
As the 2026 midterms take shape, the question isn't just who has the better slogan. It’s who owns the economic narrative. If current trends hold, with growth accelerating, tariffs reframed, and working-class voters still up for grabs, that question may decide control of Congress.
Tariffs may not be the future. But they’ve bought time. Now the political side needs to decide how to spend it.