Nikki Haley should stay in the GOP race

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WASHINGTON, DC – Thank heaven for Nikki Haley. The former South Carolina governor and United States ambassador to the United Nations has resisted pressure to drop out of the 2024 Republican presidential primary, a move that would make former President Donald Trump the party’s nominee.

Given the damage Trump’s agenda would cause if he won a second term in November, Haley should keep fighting all the way to the Republican National Convention in July. Trump is considering creating a “ring” around the US economy by imposing a 10% tariff on all imports and downgrading China’s trade status, which would increase tariffs substantially. He has even talked of applying tariffs of 60% or higher on Chinese goods.

A universal 10% tariff would have the same effect as the tariffs Trump imposed as president: higher input costs and retaliatory measures, resulting in fewer job opportunities for manufacturing workers. Moreover, the prices of many consumer goods would surge. Economists at Capital Economics estimate that this trade policy, coupled with a new economic attack on China, would cost the US 1.5% of GDP.

Haley recently hit back at Trump for wanting “to go and put 10% tariffs across the board, raising taxes on every single American.” Citing analysis from the National Taxpayers Union, she added that Trump is “going to raise every household’s expenses by $2,600 a year.” And that figure would be even higher after factoring in the 60% China tariff.

Trump’s immigration plans, if implemented, would be similarly disastrous. He has pledged to carry out the largest deportation operation in American history, which would disrupt communities and leave businesses scrambling for workers. In sectors such as food, leisure, and hospitality, consumers would have to contend with a decline in service and a spike in prices.

Trump continues to demonize immigrants, recently accusing them of “poisoning the blood” of the US. This rhetoric is morally reprehensible. It also threatens to erode America’s medium-term prosperity. A great source of the country’s economic strength has been its ability to attract some of the most ambitious, hardest-working, and most risk-tolerant people from around the world. With his stance, Trump is effectively hanging a sign saying “Immigrants Not Welcome” on the Statue of Liberty.

A second Trump term would also pose a danger to domestic and international stability and the rule of law – each a foundation of prosperity. By continuing to divide Americans along racial and class lines and lie about the outcome of the 2020 election, the former president is weakening the country’s social fabric and fanning the flames of political violence. Many rightly fear that he will weaken international alliances and even withdraw the US from NATO in the midst of a land war in Europe. At a campaign rally on Saturday, Trump sided with Russia over US allies, going so far as to “encourage” Russia to attack any NATO member that doesn’t meet its financial obligations to the alliance.

His repeated insistence that he won the 2020 election is a national betrayal. And his brazen support for the rioters who attacked the Capitol on January 6, 2021 – Trump kicked off his 2024 campaign by playing a recording of the national anthem sung by the “J6 Prison Choir” – has likely contributed to the growing share of Americans who approve of the insurrection.

A Trump win would play into the narrative of Americans as helpless victims. The economics of grievance is ineffective, counterproductive, and corrosive, eroding the foundations of prosperity. Messages matter. Tell people that the system is rigged, and they will aspire to less. Champion personal responsibility, and they will lift their aspirations. Promoting an optimistic vision of economic life can increase risk tolerance, ambition, effort, and dynamism.

Haley was correct when she called Trump “totally unhinged.” The former president was so shaken by Haley winning 43% of the vote in the New Hampshire primary that he resorted to threatening her donors. This kind of political thuggery is reason enough for her to stay in the race. It also underscores that Haley has a shot at becoming the nominee. Despite functioning as an incumbent, Trump received only 54% of the vote in New Hampshire. It takes 1,215 delegates to secure the GOP nomination; Trump has 63, and Haley has 17. The next contest is in South Carolina, which twice elected her governor.

A recent NBC News poll shows Haley leading President Joe Biden by nine points in a hypothetical matchup. This may be because Haley’s policies would be better for businesses, workers, and households than Biden’s, which contributed to record-high consumer price inflation. Moreover, Biden’s regulatory regime has chilled deal-making, and his industrial policies to support green manufacturing and energy are likely to yield disappointing results. But the same poll shows Biden beating Trump if the former president, who faces four criminal indictments, is convicted of a felony.

Haley calls herself a “happy warrior,” and rightly so. She exudes the confidence and optimism that used to define successful Republican politicians, whereas Trump is like Gollum, embodying the smallness of grievance, conspiracy, and power lust.

During a recent rally in South Carolina, Haley taunted Trump to “get on a debate stage and let’s go,” before adding, “Bring it, Donald, show me what you got.” In a recent appearance on the comedy show “Saturday Night Live,” Haley asked an actor impersonating Trump a question that should be put to the former president daily: Why won’t you debate me?

The reason is that the contrast between them would be crystal clear. Haley is a self-described “street fighter in heels.” That combination could be Trump’s worst nightmare.

Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, is the author, most recently, of The American Dream Is Not Dead (But Populism Could Kill It) (Templeton Press, 2020).