US Shift Towards Industrial Policy

The United States has recently shifted towards implementing industrial policy, a departure from decades of advocating for free trade. This change in direction is driven in part by competition from countries like China, which have seen success through planned economies. The US government has introduced tariffs and subsidies for strategic sectors, such as semiconductors, renewable energy, and infrastructure, with the aim of boosting the economy, rejuvenating the manufacturing sector, and creating jobs. This shift has made other advanced economies nervous, leading them to introduce their own subsidies to remain competitive in this new trade environment.