“President Donald Trump and NYC mayoral nominee Zohran Mamdani demonstrate that the power of political elites is in retreat in both parties — and at both the national and local levels.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• Democratic New York City mayoral nominee Zohran Mamdani’s political rise has implications for national politics.
• Industrial policy is alive and well under President Trump, with the semiconductor industry at the forefront of this experiment, even if his preferred policies are drastically different from those of former President Biden.
• A battle over extending expiring tax credits for millions of Americans who receive their health care insurance through the Affordable Care Act has become intertwined with the latest shutdown showdown.

The National Political Implications of Mayor Mamdani

Base Versus Party Elites. Zohran Mamdani’s political rise reveals a Democratic Party in transition.

• Mamdani coasted to victory in the Democratic New York City mayoral primary despite a lack of support from the traditional party establishment. His main rival, former Governor Andrew Cuomo (D-NY), racked up endorsements from state and national party leaders and labor unions but this didn’t ultimately make much of a difference with voters. Mamdani’s win indicates that endorsements from elected Democrats don’t mean the same as they may have in the past.
• Similar to how President Trump won the 2016 Republican presidential primary, breaking the hold of the old GOP establishment over the party, Mamdani’s nomination indicates that the Democratic base is also hungry for change and tired of politics as usual. Power is shifting from party leaders to the base.
• Mamdani’s defeat of more mainstream Democrats in the primary could encourage more young, ambitious Democrats outside the party establishment to challenge incumbents ahead of the midterm elections. This could make the midterms more complicated for Democrats if they have to move left to win their primaries but then have to compete in a general election.

Mamdani’s Winning Formula. Beyond ideology, the tactics behind Mamdani’s primary victory are a case study in politics today.

• Mamdani harnessed the power of social media, appealing to new voters who were less likely to turn out to vote in primaries. His natural ease with social media has allowed him to communicate directly with voters and in particular is a boon for reaching Gen Z. Trump previously made major inroads with young voters in 2024, though his approval rating is now slipping with this group.
• Mamdani’s focus on the cost of living resonated with voters, similar to how Trump seized on dissatisfaction with the economy to power his comeback bid for the presidency last year. Trump made significant gains in New York City and Mamdani found success in areas of the city where the president performed well.
• The Mamdani campaign adopted upbeat, positive messaging about the city, not unlike President Reagan’s sunny “Morning in America,” though from the opposite side of the ideological spectrum, and for his supporters, Mamdani cultivated an image of authenticity. Like Trump, Mamdani doesn’t carry himself like a typical politician, which can risk coming across as scripted for some voters.

Mamdani Moderating. Facing a general election ahead, Mamdani is moving towards the center.

• A Mamdani victory could offer Republicans a useful political foil in Gracie Mansion, but Trump has gotten involved in the race to oppose him. The president has publicly attacked the Democratic nominee and Trump staffers have reportedly discussed offering incumbent Mayor Eric Adams an administration job as an incentive to quit the race, which would give a leg up to the other moderate in the race, Cuomo. Trump may take an interest in the race because he’s still a native New Yorker at heart even after decamping to Mar-a-Lago. And with seven weeks still to go until Election Day, supporters of both Adams and Cuomo are still spending millions of dollars to try to prevent a Mamdani victory.
• A democratic socialist, Mamdani has taken steps toward the political center. He told reporters late last month that “my platform is not the same” as the national Democratic Socialists of America. In a Bloomberg interview this week, Mamdani said he would be willing to work with Trump. He has walked back previous stances on policing and high-school admissions exams, for example. Mamdani also reportedly made the rounds speaking with New York business leaders. He recently earned praise from former Chicago Mayor Rahm Emanuel (D), who previously authored a Wall Street Journal op-ed titled “My Party’s Future Isn’t Mamdani’s New York” in June. “This guy is thinking about how to hit the ground running and he showed the full capacity to do that from his questions,” Emanuel told the New York Times. “I don’t think he’s going to spend four years just throwing rhetorical bombs.”
• Despite increasing polarization, there are still political incentives to reach for the center. Mamdani’s mayoral campaign appears to offer an example.

Trump Takes an Interest in Chips

A Fresh Start. Although the federal government’s centrality to the semiconductor industry and the industrial policy goals President Trump is pursuing are not new, what is starkly different is how he is doing it.

• The most significant difference between Trump and former President Biden’s approach is Trump’s embrace of tariffs as a tool to encourage increased domestic production. The expected sectoral duties have yet to be released, but they may be unveiled later this fall. The White House has given few specifics, though Trump indicated that companies investing in the US would be exempt from the tariffs.
• The other new hallmark of Trump’s approach to the chips sector is the deals that he has struck with chip companies. The president converted Intel’s CHIPS Act funding into an equity stake in the company for the government, and he has reached deals with Nvidia and Advanced Micro Devices, allowing them to export certain restricted AI chips to China in return for a share of the revenue from these sales. While it is too early to say whether these deals will work out for the government, they symbolize the Trump administration’s aggressive embrace of industrial policy for the semiconductor sector.

New Limits Coming Soon? Where Trump has placed less emphasis so far is on export controls, but there are signs that this could change in the coming months, with the release of the White House’s replacement for the Biden administration’s AI Diffusion Rule.

• When the Trump administration decided not to move forward with the AI Diffusion Rule, it indicated it still planned to create some regulatory framework in its place. So far, details about what this will entail have been scarce, but the most recent regulatory agenda included an entry for the replacement effort. The entry indicated a proposal was to be expected after August, meaning the regulation may be released this fall.
• The White House’s lack of attention to this issue has caught the attention of some lawmakers who are now seeking to impose stricter limits through amendments to the annual defense policy bill. The Senate’s current draft includes a bill, the GAIN AI Act, that would achieve this goal, but it is not clear whether the measure has sufficient support in the House or from the White House to make the final version even if it is passed in the Senate’s draft.

Conflicting Priorities. The emerging potential headwind to Trump’s objectives is his immigration crackdown, with the spotlight on foreign companies' US operations in the spotlight after the recent raid on a Hyundai battery factory in Georgia.

• While there have yet to be any similar incidents at semiconductor facilities in the US, there is a well-documented shortage of the necessary high-skilled laborers to staff these factories, which stems partly from a lack of available visas for these workers. The lack of specifics about what prompted the Immigration and Customs Enforcement raid has also created confusion and concern for foreign businesses operating in the US, which could chill expansion plans.
• Moving forward, Trump has not shown any intentions to back away from encouraging foreign investment in the US, while continuing to crack down on immigration. This raises the possibility of future incidents that may inhibit the effectiveness of these investments or slow the realization of their benefits.

The Next Health Care Battle

The Art of the Deal. There are new signs that Democrats and Republicans may be willing to extend Affordable Care Act (ACA) tax credits to kill two birds with one stone: government funding and a bipartisan health care deal.

• Enhanced premium tax credits (PTCs) under the ACA are set to expire at the end of the year. When they do, millions of additional Americans could lose their health care coverage and individual market net premiums could nearly double. This would come at a time when health care providers, payers, and patients are already preparing for Medicaid cuts that were included in the One Big Beautiful Bill Act.
• Meanwhile, the little task of funding the federal government looms, with the critical deadline at the end of the month fast approaching. Neither party has a unified, clear strategy around what they’re asking for; both they and the two chambers of Congress have very different proposals for what they’d like. At the same time, key Medicare and other health care policies are set to expire and there is interest from some groups of members in pursuing a bipartisan health care package.
• Chatter has been picking up about the possibility of such a deal coming through. House Ways and Means Committee Chair Jason Smith (R-MO) recently told Punchbowl News that Congress should “look at everything” in upcoming negotiations, and both House Speaker Mike Johnson (R-LA) and Senate Majority Leader John Thune (R-SD) kept the door open to the possibility when asked recently. Eleven moderate, battleground House Republicans unveiled a bill earlier this month that would extend subsidies for an additional year.

Building Block or Stumbling Block? There are obstacles that would need to be resolved before anything moves forward.

• A ten-year extension, which would cost $335 billion, is likely too much of an ask by Democrats but a one- or two-year extension may be more realistic. The enhancement of the PTCs also entailed temporarily eliminating the eligibility cap, previously set to 400 percent of the federal poverty level. Republicans may also only be amenable to an extension conditional on eliminating the subsidy for the highest-earners and increased oversight. Any of these limitations could prove to be a bridge too far for Democrats to accept.
• Democrats, at the moment, do not have a unified, clear strategy for the legislative fights coming this year. While health care is a leading candidate to be their sticking point, if any Democrats want to prioritize rolling back Medicaid cuts first over the PTCs, this could lead to the collapse of any deal. Others may be hesitant to, as they see it, bail Republicans out of the situation, and are willing to let them receive the blowback from expiration. Republicans, meanwhile, have been historically comfortable laying any and all faults with Obamacare solely with the Democrats.