Cozen Currents: Democrats’ Not So Invisible Primary

“As the Democratic Party struggles to find a coherent and effective approach to oppose President Trump and the GOP’s policy agenda, those looking to throw their hat in the ring for the party’s 2028 presidential nomination are pursuing myriad paths, with some trying to be more visible than others at this early stage of the so-called ‘invisible primary.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• The race for the 2028 Democratic presidential nomination is wide open and the field is beginning to take shape. Major lanes include former Biden administration officials, governors, and senators.
• As stablecoin legislation advances one step closer to becoming law, an even more sweeping effort to create a regulatory framework for a wider array of digital assets is gaining momentum in Congress.
• While President Trump is fixated on tariffs, the standoff between the world’s two largest economies is increasingly focused on respective export controls that cover strategic supply chain chokepoints.

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Democrats’ Varied Lanes to 2028 Presidential Nomination

Veterans of the Biden Administration. Former Vice President Kamala Harris tops the list of potential 2028 Democratic presidential candidates.

• Harris has recently resumed making public appearances since dropping out of the public eye following her loss to President Trump in the 2024 election. If she doesn’t run for California governor, she could be a strong contender but would face unfavorable historical trends. Democrats haven’t awarded the nomination to the loser of a general election since 1956 (before the modern primary system).
• Other former Biden administration officials may also throw their hat in the ring. Rahm Emanuel, former President Biden’s ambassador to Japan and former President Obama’s chief of staff, is increasingly vocal about the future of the party and will participate in an Iowa Democrats fish fry later this year. Former Commerce Secretary Gina Raimondo said that she was considering a run at an April event and former Transportation Secretary Pete Buttigieg, having opted out of open races for Michigan governor and senator, has been raising his public profile recently.
• Any potential 2028 presidential contenders who served under Biden will have to sufficiently differentiate themselves from the former president, whose legacy voters rejected last year, which could prove challenging.

Governors. Democratic primary voters could look for fresh faces beyond Washington, DC in the states.

• In 1992, Democrats staged a comeback after a bruising loss in 1988 and 12 years out of the White House with a little-known governor from Arkansas: Bill Clinton. Some of the party’s governors may seek to follow in his footsteps.
• Governors with potential 2028 hopes are taking different approaches under Trump 2.0. Governor Gavin Newsom (D-CA) has emerged as a combative leader of the opposition in response to President Trump’s federalization of the California National Guard to quell protests in Los Angeles, though maintaining this role may be challenging. Governor Gretchen Whitmer (D-MI), on the other hand, has adopted a more cooperative relationship with Trump.
• While Newsom has perhaps attracted the most attention, Governor JB Pritzker (D-IL) has attracted presidential buzz amid his opposition to the Trump administration and Governor Wes Moore (D-MD), though just elected in 2022, is also the object of 2028 speculation. Governor Tim Walz (D-MN), the 2024 vice-presidential nominee, said he would consider a bid in March.
• Democratic governors who have won in states that voted for Trump in any of his three presidential elections, such as Whitmer, Andy Beshear (D-KY), and Josh Shapiro (D-PA), offer resumes that could strengthen the party’s appeal to working-class voters.

Senators. Democrats also have a deep bench of senators and as the saying goes, “every senator looks in the mirror and sees a president.”

• Senators have a strong track record in winning the Democratic presidential nomination. Since 2000, every one of the party’s nominees has been a current or former senator.
• Senators Amy Klobuchar (D-MN) and Cory Booker (D-NJ), who ran for the nomination in 2020, may decide to try again. Booker established himself as a major opponent of Trump’s agenda by claiming the record for longest individual floor speech in Senate history when he spoke for over 25 hours in protest of the administration this spring.
• Senators who have won in states that awarded their electoral votes to Trump last year, including Ruben Gallego (D-AZ), Raphael Warnock (D-GA), and Elissa Slotkin (D-MI), may also be well positioned for a White House bid.

The Senate’s Stable GENIUS

A High Watermark for Stablecoin Legislation. The Senate is set to pass the chamber’s stablecoin regulatory bill, the GENIUS Act, today, marking the first time a major crypto bill has successfully advanced out of Congress’ upper chamber.

• The GENIUS Act will establish the first US regulatory framework for payment stablecoins, broadly defined as digital assets used for payment and settlement and redeemable for a fixed (and stable) monetary value. Under the legislation, stablecoin issuers would need to back 100 percent of their stablecoin holdings with safe and liquid assets, such as US dollars. Non-bank stablecoin issuers with a market capitalization of over $10 billion would be regulated by federal prudential regulators led by the comptroller of the currency while those with a lower market capitalization could opt for state-level regulation with “substantially similar” regulatory frameworks.
• Before the GENIUS Act reached the Senate floor in its current form, key Senate Democratic backers of the effort to regulate digital assets secured a handful of pivotal changes that broadened the bill’s consumer protections. Among the most significant additions to the bill was a provision restricting publicly traded nonfinancial companies’ ability to issue their own stablecoins.
• Before the Senate’s stablecoin bill can become law, it will need to clear the House where it awaits an uncertain fate in its current form. House Financial Services Committee (HFSC) Chair French Hill (R-AR) and HFSC Digital Assets Subcommittee Chair Bryan Steil (R-WI) introduced their own stablecoin legislation, known as the STABLE Act, back in March. While the House’s stablecoin bill closely tracks that of the Senate, it differs in a number of key areas including the regulation of foreign stablecoin issuers, restrictions on certain companies’ ability to issue stablecoins, and the interplay between state and federal regulatory frameworks, among other things. Hill told Coindesk earlier this month that the differences between the two bills “…are not insurmountable but do need to be rectified and clarified.”

Crypto’s White Whale. While the stablecoin bill is the crypto legislative effort that has progressed the furthest to date in Congress, the industry – and the White House – have their sights set on the enactment of a much more sweeping regulatory framework for digital assets.

• Since as early as 2022, crypto-focused lawmakers in Congress have been working to advance a framework for digital asset regulation that goes beyond stablecoins, establishing clear guardrails for issues surrounding custody, registration, and digital asset trading systems. The latest iteration of the sweeping effort, colloquially referred to as the crypto market structure bill, is the House’s CLARITY Act. The legislation would give the Commodity Futures Trading Commission authority over digital asset commodity markets, which would represent the majority of domestic crypto activity, while also providing a pathway to registration with the Securities and Exchange Commission.
• Despite the greater complexity of ironing out an agreement on the market structure bill, House lawmakers are moving to quickly advance the larger bill alongside or soon after the stablecoin bill. The HFSC and the House Agriculture Committee both advanced the market structure bill out of their respective committees with bipartisan support last week. HFSC Chair Hill has previously suggested that he could push House leadership to hold a floor vote on both the stablecoin bill and the market structure at the same time. Both Hill and members of the crypto industry believe that informally tying the two bills together could help speed up their final passage.
• Spurring Hill along is President Trump’s desire for Congress to deliver the two major crypto bills to his desk before lawmakers go on their August recess, an ambitious timeline that would require speedy Senate consideration of the market structure legislation. Senate Banking Committee Digital Assets Subcommittee Chair Cynthia Lummis (R-WY) recently told Politico that the committee would unveil its own market structure bill later this month. Lummis noted that she expects the bill “…to look very much like the House bill,” but just how significant the differences are and how difficult they are to reconcile will play a significant role in determining the speed with which the legislation advances through Congress.

The Other Front in the US-China Trade War

From Tariffs to Tech. As the world’s two largest economies enter a delicate detente, broad decoupling is giving way to targeted decoupling.

• President Trump announced details of a “final” deal between the US and China last week following a framework reached in Geneva in May. US tariffs will be set at 55 percent; Chinese tariffs will be set at 10 percent. While the tentative removal of triple-digit duties on both sides that were tantamount to an embargo is good news for those hoping for a restoration of normal relations, in reality, the focus is simply moving from general restrictions to targeted measures that are arguably just as important.
• The current 55 percent duties are sufficient for the administration to achieve its economic goals of promoting domestic manufacturing for a swath of goods across the entire economy. For some selected industries, however, this isn’t good enough — the motivation for on shoring isn’t merely economic but also for protecting national security interests. There are certain fields in which reliance on China is not merely a disinclination to be avoided but an unacceptable prospect altogether for the GOP.
• Such actions fit nicely into the president’s playbook: unilateral in nature (not requiring Congress to act), relatively quick, and on solid legal footing. Tariffs on specific sectors can be launched via the Section 232 mechanism, which has already been used this term to modify duties on steel and aluminum and initiate new tariffs on automobiles. These tariffs require the Commerce Department to complete an investigation to act, which takes at least a few months of preparation but are much less assailable than those recently challenged in the courts. Export controls and investment restrictions are similarly firmly within the wheelhouse of the executive branch to act decisively.

It’s a Tech War and a Trade War. The Trump administration is motivated to gain the upper hand in tech development that will “win the future” in addition to ensuring general economic prosperity.

• What looms largest in the coming months for US export control policy affecting China and beyond is how the administration will replace the AI diffusion rule that the Biden administration proposed in its final days. Though Trump rescinded Biden’s proposal, his administration is still expected to issue its own version. The ability for China to receive chips through third-party countries is one of the driving motivations behind the regulation.
• Tariffs on semiconductors are also pending. While the Commerce Department did not include a specific number in its formal announcement of the investigation, Trump’s previous sectoral tariffs would suggest that the rate is not likely to be less than 10 percent and will more likely max out at 25 percent. The decision to impose license requirements for Nvidia’s and Advanced Micro Devices’ sales of their respective H20 and MI308 chips and on software design companies is the first sign of how this hawkish philosophy will translate into policy.
• China, of course, has cards of its own to play, namely, export controls on rare earth and critical minerals. Trump’s imposition of restrictions on the sale of chips and aircraft parts to China as well as student visas led the Chinese to balk on its commitments to allow exports of parts made from these minerals made in Geneva, which caused some US manufacturers to temporarily close Commerce Secretary Lutnick said that the most recent deal in London would lift some of these restrictions though details are still forthcoming. This incident shows how both sides will likely use export controls over areas they identify as strategic supply chain choke points to gain leverage over the other.

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