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Industrial Policy Bill

Updated: Mar 25, 2023

By: Matthew Kwong



Since gaining sovereign independence, the United States has continuously focused on staying ahead of other nations in technological and economic development. The United States’ number one ranking in military and economic power hasn’t come by mere chance; it is from its mass allocation of resources and federal funds towards the macro aspect of the nation in pursuit of international competition, evident in the Arms Race and Space Race with the Soviet Union decades ago and continued today with the Senate passing the bipartisan bill to counter China’s growing technological presence.


The $280 billion bill aims to build America’s manufacturing and technological advancements to counter China, leading to an overwhelming bipartisan vote in the Senate. Arguably the most significant government intervention in industrial policy in decades, the 64-33 vote reflects a rare consensus in Congress in favor of forging a long-term political strategy to address the nation’s intensifying geopolitical rivalry and competition with China. The plan centers around investing in cutting-edge technologies and innovations to strengthen the nation’s industrial, technological and military strength, especially concerning China.

In addition to the bill’s support of commercial and military competition with China, it also promises thousands of new American jobs, generating unprecedented agreement between Republicans who are generally against government intervention and Democrats who usually resist showering monopolies with federal funds. The bill is expected to pave the way for constructing factories across the country and generate an estimated tens of thousands of jobs.


Source: cnn.com

The bill, a convergence of economic and national security policy, will provide $52 billion in subsidies and additional tax credits to companies that manufacture chips in the United States to promote technological advancements. It will also allot $20 billion to the Department of Energy and the National Science Foundation to promote research and development in advanced semiconductor manufacturing and workforce development programs to build labor for emerging industries. This increased allocation of federal funds toward technological development has fostered national political attention.


Senator Tester, Montana’s leading champion for China competitiveness legislation, said,

“This bipartisan legislation is focused on two things: bringing good-paying jobs back to America and maintaining our position as the world’s leading economic power in the face of China’s efforts to dominate the global economy.” In agreement, Senator Chuck Schumer, Democrat of New York and the majority leader who helped spearhead the measure, said in an interview, “No country’s government—even a strong country like ours—can afford to sit on the sidelines.”


As shown, the bill generated widespread national agreement to preserve America’s reputation in technology. If this trend of prioritizing technological progression continues, the United States can expect to see itself as not only the “winner” in this international race but cease political polarization about the pursuit of American nationalism through technological advancements.


Many senators, including Republicans, see the legislation as critical to strengthening America’s manufacturing abilities, especially since much of America’s economy relies on foreign production. The bill hopes to reduce the need for direct trade of technological goods, most notable in America’s reliance on Taiwan’s production of computer chips, by increasing domestic production. It calls for $10 billion into the Department of Commerce, implementing chip subsidies to companies that apply across the country, aiming to create 20 regional technology hubs. Though the United States is leaning towards becoming more economically independent, the purpose of these hubs is to link research universities with private industry to create “Silicon Valley-like centers for technology innovation in areas hollowed out by globalization,” according to Senator Todd Young, Republican of Indiana, and Senator Chuck Schumer, Democrat of New York. However, the passage of the legislation wasn’t just a year’s work: Senator Schumer first proposed this idea in 2019 to Senator Young, who had previously collaborated with Democrats on foreign policy, but due to economic limitations at the time, such as Covid-19, the official legislation was postponed.


Though this bill is considered unprecedented in the modern day in that the United States has never before devoted this much of its funds towards technological competition except during the Space Race, the United States has long focused on technological development marked by centuries of innovation. At first, the bill was known as the Endless Frontier Act, a reference to the 1945 commission by President Franklin D. Roosevelt to investigate how the federal government could promote scientific progress and workforce. President Roosevelt had said, “New frontiers of the mind are before us, and if they are pioneered with the same vision, boldness, and drive with which we have waged this war. We can create a fuller and more fruitful employment and a fuller and more fruitful life.” Carrying on President Roosevelt’s legacy of shaping America’s pursuit of technological advancements, the bipartisan bill acts as a significant stepping stone for America’s future involvement in the cyber sphere of technology. If this bill can successfully implement the changes the Senate hopes it will, this trend will continue to set a precedent for technological advancements in the future, just as President Roosevelt did. Especially now, with Russia pulling out of the International Space Station after decades in the Space Race with the United States, the United States can be hopeful that they will win in the same sense against China’s growing involvement in international technology.



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