President Biden has embraced the idea of subsidies for key industries and measures to shut out Chinese competitors. Revitalized manufacturing is a theme he hopes to drive through 2024.
Andrew Limbong, Host:
As President Biden prepares for his reelection bid, there is one central theme he continues to repeat. Invest in America. It’s a vision of how Biden wants the government to help rebuild the economy. This is what experts call industrial policy. NPR’s White House correspondent Asma Khalid has more.
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ASMA KHALID, BYLINE: It’s a busy morning at Marlin Steele in Baltimore.
DREW GREENBLATT: This laser is using light to cut steel.
KHALID: Drew Greenblatt owns this manufacturing plant, where workers cut, bend and weld steel into special wire baskets. They will end up everywhere from the lab to the factory. In 2020, when Covid hit and supply chains were disrupted, his business flourished.
Greenblatt: And we started making IV poles. We also started making things like sanitizer stands where you put your hand under a little soap dispenser. That stopped coming from abroad. Test tube racks have stopped coming from abroad.
Khalid: The pandemic sent a message.
Greenblatt: American companies shouldn’t put their eggs in the Chinese basket. It’s just too dangerous.
Khalid: But Greenblatt was already on this mission. There are half a dozen American flags on his factory floor. He’s happy that Biden is, in his words, following Donald Trump’s vision to do more in America.
Greenblatt: But right now it’s very unfair to build in America compared to China because there’s so much stacked against us.
Khalid: Greenblatt wants Biden to go further. He wants less regulation and a tax break for R&D. Ultimately, he says, supporting American manufacturing is smart policy and smart politics.
Greenblatt: Whoever can get more factories in the fast-growing America is going to win a lot of votes.
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KHALID: Biden has been touting his economic agenda on the road a lot lately, touring factories like this semiconductor facility in Durham last month.
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President Joe Biden: This is the largest investment in manufacturing in North Carolina history.
KHALID: Experts say that if you look at the whole package of economic policies of this White House, it’s unprecedented in recent times. Biden’s team is systematically crafting industrial policy to try to shape markets and the private sector. Brian Deese was Biden’s top economic adviser and helped lead the push.
Brian Deese: We’ve been using targeted public investment for the first time really since the 1960s, and in many cases earlier, over multiple years to try to crowd in private capital.
Khalid: They are doing it in several ways. They are subsidizing semiconductor plants and electric vehicles. They are keeping Chinese goods out by maintaining Trump-era tariffs and imposing sweeping export controls to limit China’s access to technology. According to Dani Rodrik, they are doing this in public, which is even more unusual. He is an economist at Harvard.
Dani Rodrik: Among economists and mainstream policymakers, they think industrial policy, for decades now, is a dirty word. And I think that’s sort of changed completely now.
Khalid: It has changed because the politics of the right and the left have changed, and politicians have decided that China is a common enemy. Rodrik says the atmosphere now is similar to the U.S.’s fear of the Soviet Union in the 1950s. This stimulated government programs that eventually led to technological innovations such as GPS and the Internet.
Rodrik: But there’s also a huge difference—that the United States was not as economically integrated with the Soviet Union as it is now with China.
Khalid: The US and China are very dependent on each other for trade. But the Biden team says China is not playing well. Brian Deese here again.
DEESE: A purely laissez-faire, trickle-down approach that ignores China’s role in the world economy, I think – doesn’t work.
KHALID: The White House has said that the Chinese government provides a lot of subsidies and steals technology, so the United States needs to step in to help American companies and American workers. When I spoke with Commerce Secretary Gina Raimondo, it was clear that this mission is also about national security.
Gina Raimondo: We buy 92% of advanced semiconductors from Taiwan – a very weak position for the US.
Khalid: He said there are certain industries like chips that are very important to outsource. And so the government is funding companies to build factories in America. In the 80s and 90s, when many manufacturing plants closed, he said there were devastating economic consequences. He knows himself.
Raimondo: My father – he and all his friends were laid off when all the work at his watch factory went to China.
KHALID: But for decades, many politicians on both sides of the aisle proudly supported free trade even as America’s manufacturing capacity declined.
Raimondo: We were just, I guess, a little slow to wake up to that. Covid was great eye opener. Four years ago nobody was talking about supply chain.
Khalid: The pandemic has accelerated the conversation. But the election of Donald Trump and his appeal to blue-collar workers in particular has prompted some soul-searching.
Scott Paul: A transition has been part of everyone.
Khalid: Scott Paul is president of a lobby group called the Alliance for American Manufacturing
PAUL: You can cut and paste some of Trump’s trade policies, and they’re now the Democratic platform.
Khalid: In 2000, Biden, like many Republicans and Democrats, voted to normalize trade relations with China. But nearly 20 years later, the political debate has shifted. Christine McDaniel with George Mason University is one of the rare voices in Washington openly skeptical of the change.
Christine McDaniel: Industrial policy means that through government taxes, subsidies, incentives, rules, regulations, you’re taking resources from one part of the economy and reallocating them to another part, right? Governments are notorious – unfortunately, they don’t have a very good track record of picking winners and losers.
Khalid: But industrial policy advocates say the United States has always helped companies in one way or another. And so the debate should be how to do this most effectively. And Biden supporters jumped at the idea that the president was copying his predecessor. While the mission is the same, they say Biden has a better plan and is pursuing it.
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KHALID: Back at the cable factory in Baltimore, Drew Greenblatt says it doesn’t matter what Republicans or Democrats say in Washington.
Greenblatt: I don’t care about messaging. I only care about policies that affect my factories
Khalid: So whether people say so or not, make things in America…
GREENBLATT: It’s all – it’s all word salad.
KHALID: But he insists that supporting American manufacturing is a winning political proposition. And as he told me, whoever can build and run more factories in America is going to win a lot of votes. Asma Khalid, NPR News.
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