economic

ALLENTOWN, Pa. — When Idalia Bisbal moved to this Pennsylvania city synonymous with America’s working class, she hoped for a cheaper, easier life than the one she was leaving behind in her hometown of New York City.

About three years later, she is deeply disappointed.

“It’s worse than ever,” said the 67-year-old retiree, who relies on Social Security, when asked about the economy. “The prices are high. Everything is going up. You can’t afford food because you can’t afford rent. Utilities are too high. Gas is too expensive. Everything is too expensive.”

Bisbal was sipping an afternoon coffee at the Hamilton Family Restaurant not long after Vice President JD Vance rallied Republicans in a nearby suburb. In the Trump administration’s second high-profile trip to Pennsylvania in a week, Vance acknowledged the affordability crisis, blamed it on the Biden administration and insisted better times were ahead. He later served food to men experiencing homelessness in Allentown.

The visit, on top of several recent speeches from President Trump, reflects an increasingly urgent White House effort to respond to the economic anxiety voiced by people across the country. Those worries are a vulnerability for Republicans in competitive congressional districts like the one that includes Allentown, which could decide control of the U.S. House in next year’s midterms.

But in confronting the challenge, there are risks of appearing out of touch.

Only 31% of U.S. adults now approve of how Trump is handling the economy, down from 40% in March, according to a poll from the Associated Press-NORC Center for Public Affairs Research. Yet Trump has called affordability concerns a “hoax” and gave the economy under his administration a grade of “A+++++.” Vance reiterated that assessment during his rally, prompting Bisbal to scoff.

“In his world,” Bisbal, a self-described “straight-up Democrat,” responded. “In the rich man’s world. In our world, trust me, it’s not an ‘A.’ To me, it’s an ‘F,’ ‘F,’ ‘F,’ ‘F,’ ‘F,’ ‘F.’”

Agreement that prices are too high

With a population of roughly 125,000 people, Allentown anchors the Lehigh Valley, which is Pennsylvania’s third-largest metro area. In a dozen interviews last week with local officials, business leaders and residents of both parties, there was agreement on one thing: Prices are too high. Some pointed to gas prices while others said they felt the shock more at the grocery store or in their cost of healthcare or housing.

Few shared Trump’s unbridled boosterism about the economy.

Tony Iannelli, the president and CEO of the Greater Lehigh Valley Chamber of Commerce, called Trump’s grade a “stretch,” saying that “we have a strong economy but I think it’s not yet gone to the next stage of what I would call robust.”

Tom Groves, who started a health and benefits consulting firm more than two decades ago, said the economy was at a “B+,” as he blamed the Affordable Care Act, widely known as Obamacare, for contributing to higher health costs, and he noted stock and labor market volatility.

Joe Vichot, the chairman of the Lehigh County Republican Committee, referred to Trump’s grade as a “colloquialism.”

Far removed from Washington’s political theater, there was little consensus on who was responsible for the high prices or what should be done about it. There was, however, an acute sense of exhaustion at the seemingly endless political combat.

Pat Gallagher was finishing lunch a few booths down from Bisbal as she recalled meeting her late husband when they both worked at Bethlehem Steel, the manufacturing giant that closed in 2003.

Now retired, Gallagher too relies on Social Security benefits, and she lives with her daughter, which helps keep costs down. She said she noticed the rising price of groceries and was becoming exasperated with the political climate.

“I get so frustrated with hearing about the politics,” she said.

A front-row seat to politics

That feeling is understandable in a place that often gets a front-row seat to the national debate, whether it wants the view or not. Singer Billy Joel’s 1982 song “Allentown” helped elevate the city into the national consciousness, articulating simultaneous feelings of disillusionment and hope as factories closed.

In the decades since, Pennsylvania has become a must-win state in presidential politics and the backdrop for innumerable visits from candidates and the media. Trump and his Democratic rival in 2024, Kamala Harris, made several campaign swings through Allentown, with the then-vice president visiting the city on the eve of the election.

“Every race here, all the time,” Allentown’s mayor, Democrat Matt Tuerk, recalled of the frenzied race last year.

The pace of those visits — and the attention they garnered — has not faded from many minds. Some businesses and residents declined to talk last week when approached with questions about the economy or politics, recalling blowback from speaking in the past.

But as attention shifts to next year’s midterms, Allentown cannot escape its place as a political battleground.

Trump’s win last year helped lift other Republicans, such U.S. Rep. Ryan Mackenzie, to victory. Mackenzie, who unseated a three-term Democrat, is now one of the most vulnerable Republicans in Congress. To win again, he must turn out the Republicans who voted in 2024 — many of whom were likely more energized by Trump’s candidacy — while appealing to independents.

Mackenzie’s balancing act was on display when he spoke to the party faithful Tuesday, bemoaning the “failures of Bidenomics” before Vance took the stage at the rally. A day later, the congressman was back in Washington, where he joined three other House Republicans to rebel against the party’s leadership and force a vote on extending Obamacare subsidies that expire at the end of the year.

Vichot, the local GOP chairman, called Mackenzie an “underdog” in his reelection bid and said the healthcare move was a signal to voters that he is “compassionate for the people who need those services.”

A swing to Trump in 2024

Lehigh County, home to Allentown and the most populous county in the congressional district, swung toward Trump last year. Harris’ nearly 2.7-percentage-point win in the county was the tightest margin for a Democratic presidential candidate since 2004. But Democrats are feeling confident after a strong performance in this fall’s elections, when they handily won a race for county executive.

Retaking the congressional seat is now a top priority for Democrats. Gov. Josh Shapiro, a Democrat who faces reelection next year and is a potential presidential contender in 2028, endorsed firefighter union head Bob Brooks last week in the May primary.

Democrats are just a few seats shy of regaining the House majority, and the first midterm after a presidential election historically favors the party that’s out of power. If the focus remains on the economy, Democrats are happy.

The Uline supplies distribution factory where Vance spoke, owned by a family that has made large donations to GOP causes, is a few miles from the Mack Trucks facility where staff was cut by about 200 employees this year. The company said that decision was driven in part by tariffs imposed by Trump. Shapiro eagerly pointed that out in responding to Vance’s visit.

But the image of Allentown as a purely manufacturing town is outdated. The downtown core is dotted by row homes, trendy hotels and a modern arena that is home to the Lehigh Valley Phantoms hockey team and hosts concerts by major artists. In recent years, Latinos have become a majority of the city’s population, driven by gains in the Puerto Rican, Mexican and Dominican communities.

“This is a place of rapid change,” said Tuerk, the city’s first Latino mayor. “It’s constantly changing ,and I think over the next three years until that next presidential election, we’re going to see a lot more change. It’s going to be an interesting ride.”

Sloan writes for the Associated Press.

The Central Economic Conference in Beijing in December 2025 identified eight key tasks for China’s economic work in 2026. Several of these areas particularly interest me as a China expert. Among the most important tasks for China’s economic work in 2026 is promoting a policy of supporting service exports through various measures to boost household income, raise basic pensions, and remove restrictions in the consumer sector. What struck me most during the Central Economic Conference meetings in Beijing in December 2025 was its emphasis on China’s continued opening up. This will provide tremendous global growth opportunities by expanding trade and investment, especially in the technology and renewable energy sectors, deepening integration into global value chains, and increasing demand for resources. This will drive the global economy in conjunction with China and create new partnerships, focusing on “high-quality development” and “high-level opening up” as fundamental pillars for mutual benefit and to stimulate innovation within the Chinese economy.

–            Main Tasks of the Beijing Economic Conference in December 2025

1)       Providing a huge market and investment opportunities: By increasingly encouraging the opening of its doors to foreign companies, China will create diverse opportunities in various sectors such as technology, innovation, and services.

2)       Making the Chinese economy an engine of global growth: The recovery and growth of the global economy depend heavily on China’s contribution, which accounts for a large share of the global economy.

3) Expanding free trade: China strongly supports free trade and the signing of regional agreements, reducing barriers and promoting trade exchanges.

4) Expanding the wheel of Chinese overseas investment: By significantly deepening the contribution of Chinese direct investment abroad to the economic development of other countries.

5)       Promoting innovation-led development in China to accelerate the development of new growth engines in 2026: This will bring significant benefits to foreign consumers and investors.  The meeting approved a package of policies aimed at strengthening the role of companies in innovation and implementing a new round of measures to develop high-quality key industrial chains, deepening and expanding fields such as artificial intelligence, which will bring more innovation opportunities to the world.

– Sectors in which China will expand in the future:

A) Innovation and Technology: China is a leader in fields such as artificial intelligence, renewable energy, and agricultural technology, driving global innovation.

B) Advanced Manufacturing: China’s rapid transition to high-quality development focuses on industrial upgrading and technological innovation, creating new products and services.

C)     Promoting Globalization: China opposes protectionism and supports inclusive economic globalization, creating a more interconnected and integrated global economy.

D)     Building a Community with a Shared Future for Mankind: The ultimate goal of China’s economic growth is to achieve common development and improve livelihoods for all, promoting win-win international cooperation.

–             Areas of China’s contribution to global development and the global economy in 2026, through:

1)       Product supply: As the “world’s factory,” with a focus on advanced technology.

2)       Demand stimulation: China’s enormous demand for commodities, energy, and raw materials supports other economies.

3)       Knowledge and technology transfer: Through investments and joint ventures.

4)       Support for sustainable development: By focusing on clean energy and green sectors.

   Accordingly, we understand that the main tasks for 2026, identified during the Central Economic Conference in Beijing in December 2026, are comprehensive and diverse. Chief among them is building a strong domestic market in China, reflecting a future strategic direction for the Chinese economy. This will promote sustainable development, support high-quality growth, foster innovation-led development, and uphold openness to the outside world. This means providing broader development opportunities for foreign investment and achieving growth that is synchronized with the development of the Chinese economy.

Trump is also set to preview his 2026 priorities during Oval Office ‘address to the nation’.

As Afghanistan reevaluates its economic geography in light of the deteriorating relations with Pakistan, India has become a major option for Kabul in its quest for diverse trade routes. The recent top-level meetings between the Taliban and the Indian government indicate a desire on the part of the former to diminish their reliance on the Pakistani transit corridors and to gain more strategic independence. However, India’s role is more a matter of political calculation than of geographical convenience. Afghanistan has no direct land route to India, and therefore its trade with India is expensive routes via Iran with limited air corridors, making it very difficult for a sanctions-hit and cash-strapped economy to scale up. Although the engagement with New Delhi gives the Afghan government the chance to send diplomatic signals and obtain very limited economic relief, it also poses the question of whether India is going to be a long-term trading partner or merely a geopolitical counterweight in Kabul’s broader regional strategy.

Taliban officials have begun signalling a recalibration of economic policy. Deputy Prime Minister for Economic Affairs Mullah Abdul Ghani Baradar publicly urged Afghan traders to explore alternative transit corridors, accusing Pakistan of using border closures as a tool of political pressure. Shortly thereafter, Nooruddin Azizi, Minister of Industry and Commerce of Afghanistan, had an official visit to New Delhi on 19 November 2025 for official discussions aimed at increasing bilateral trade, enhancing the mechanisms for import and export and finding out different ways for Afghan businesses to trade. This visit comes after the Afghanistan’s Minister of Foreign Affairs Amir Khan Muttaqi’s trip to India in October that lasted for eight days, which was his first trip to India, for which he was granted a temporary UN sanctions exemption, even though India has not yet recognized the Taliban government.

Over the past two decades, the Taliban’s propaganda has been persistently depicting India as a Hindu “kafir” state that is supporting the “anti-Islam” forces in Kabul, making Indian diplomats look like enemies and Indian consulates like secret intelligence stations working against Afghanistan and Pakistan. The destruction of the Bamiyan Buddhas was declared as a holy war against the “un-Islamic idols” and the whole Buddhist-Hindu civilization, which was a clear indication of the Emirate’s hardline ideological approach. However, this narrative has changed for political and economic reasons.

Moreover, the Taliban, having once described the Indian state as their ideological enemy, are now actively courting India, even sending their foreign minister and commerce minister to New Delhi to get access to trade routes and investment in infrastructure. However, the newly established open channels of communication between the two parties are indicative of a major pragmatism shift, wherein the former rhetoric of enmity and ideological purity has been replaced by the language of using one another in business transactions, thus, signaling the willingness of Afghanistan to retrieve economic lifelines and gain a strategic position in a region.

Historically, Taliban’s official communications are filled with references to Islamic unity, historical connections, and the values of Muslim brotherhood in its relationship with Pakistan. However, when relations with Islamabad were strained over the Tehrik-i-Taliban support, as well as border management and refugees; the Emirate quickly turned to engagement with other regional states instead of reconciliation with its closest Muslim neighbor. This selective realism reveals a definite order of priorities; Afghanistan is ignoring Pakistan’s main security issues but is ready to do anything for a state that is Hindu-majority and can offer trade routes, investment, and international legitimacy.

This transactional approach is not only limited to regional politics but also encompasses the global economic system. The Taliban constantly criticized “Western economic slavery“, interest-based financial systems and considering themselves as an ideological alternative to the West. Nowadays, the Taliban are lobbying India who is heavily involved in the Western capital markets and global financial networks positively to get banking access, reconstruction projects, and investments. The ideological rigidity at home is sharply contrasted with the foreign policy flexibility; those states which were once labelled as anti-Islamic are now being courted for material and political gains.

The Taliban’s selective pragmatism is also evident in the territorial and security sensitive issues. On one hand, they keep on challenging the issue of the Durand Line with Pakistan, an internationally recognized border between both states, while on the other hand, they are quite liberal with India. Likewise, in the past, Taliban-associated clerics and militants celebrated jihad in Kashmir, denounced Indian government actions toward Muslims there and such discourse got muted during visits to Delhi. It is very clear that economic and diplomatic goals are prioritized over ideological or sectarian consistency.

Afghanistan’s trade pivot underscores the delicate balance between ambition and structural reality. While the Taliban’s efforts to diversify transit routes reflect a desire for economic autonomy and greater regional leverage, geographic constraints, limited infrastructure, and entrenched economic patterns impose severe limitations. Engagement with India offers symbolic and partial relief, yet Pakistan remains the linchpin of Afghan commerce, providing the fastest and most cost-effective access to global markets. The Emirate’s strategy is as much a political signal-demonstrating flexibility, pragmatism, and a quest for de facto recognition as it is an economic maneuver. Ultimately, Afghanistan’s “strategic heart of Asia” narrative will be tested not by intent but by its capacity to reconcile aspiration with the unyielding realities of terrain, logistics, and regional interdependence.