US Industrial Policy: Biden Seeks to Reshape the US Economy

• There has been a structural shift in US domestic economic policy by the Biden Administration – commonly referred to as “Bidenomics.” Onshoring and nearshoring are the most common components of this policy.

• Biden and his team believe the US industrial base has been “hollowed out” and needs strong US government support and funding to build it back up.

• There are three pillars to Bidenomics:

Ø The quality of economic growth matters more than the quantity.

Ø Laissez-faire economics (embraced by Republicans and most moderate Democrats) does not work. Why? Because it does not factor in issues like climate change, fragile supply chains, or geopolitical vulnerabilities. Thus, private capital must be directed toward favored sectors via regulation, subsidies, and government intervention.

Ø Trade policy should give priority to American workers – not consumers.

• US foreign policy must not only incorporate but also champion a range of economic issues: workers rights, climate, tax.

Sources: Bloomberg; The Economist