There is an old saying in the world of manufacturing: once an industry leaves, it won’t come back. It’s the Humpty Dumpty of economics. This is why the Germans, who know a thing or two about industry, have been fighting deindustrialisation so hard. The US and the UK gave up on industry decades ago, but the Biden administration wants it to return. The instrument of choice is last year’s Inflation Reduction Act, with its $370bn programme of green subsidies. I fear the US underestimates the scale of the task.
The intellectual force behind that strategy is Jake Sullivan, Joe Biden’s national security adviser. It is a sign of the times that foreign policy dictates the most important strategic economic policy shift in decades. Sullivan has cited the hollowing out of the US’s industrial base as one of the reasons behind the strategy. The other, of course, is China.
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