![]() I don’t think the government stepping in to help a domestic industry is itself bad. ![]() Tammy Kim used to describe how both parties’ candidates in Ohio’s Senate race have promised to bring back manufacturing jobs from China. It reminds me of the term “economic nationalism,” which the New Yorker writer E. Whether the administration admits it or not, I think these moves to build up domestic industries are a form of protectionism. And it just might work! After all, it’s precisely the success of the Chinese government at growing key technology sectors in short periods of time that pushed the US to act in the first place. (You can read more here about how the pandemic highlighted this issue.)ĭespite that growing distrust, these new policies follow the same playbook that China has used for decades: generous industry subsidies, government funding for academic institutions, and entry barriers for foreign competitors to protect domestic companies. These orders aim to move industries that emigrated from the US back stateside. But now, I think both sides will agree, that kind of trust doesn’t seem realistic anymore. The TL DR here: The US and China used to trust each other in industrial cooperation and trade, despite ideological differences. But at their heart, the other two orders-which are about the semiconductor supply chain and the biotech supply chain-focus on making sure technological advancement and economic activities happen on US soil. The others: Okay, they may seem a little boring now that we’ve heard so much about supply chain problems over the past few years. But, speaking as a journalist, isn’t more transparency better? It will arguably help the agency use its resources more efficiently and effectively, and also help stakeholders know what to expect. To be fair, the new “focused scope” of CFIUS still reads as incredibly broad and can likely be used however the federal government wants. It lists a few industries that CFIUS should prioritize-microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, and climate adaptation technologies-and also singles out threats to personal data protection, provisions the committee could use to justify blocking deals in consumer tech that aren’t traditionally seen as a national security risk. Why? CFIUS didn’t clarify, but the building is a) located blocks away from Trump Tower and b) home to a police precinct in charge of the security work for Trump Tower. (My favorite odd example is from 2018, when the committee asked HNA, the Chinese conglomerate behind an aviation group of the same name, to sell a building in Manhattan. No one knew for sure what sectors CFIUS was most interested in screening the deals it has blocked have been all over the place. Previously, CFIUS cast a long and undefined shadow on any business acquisition activities between the US and China. If you want to know more, here’s a short explainer on CFIUS. To catch you up, CFIUS is an interagency committee spanning 16 federal departments, including Treasury and Defense-and it’s one of the major weapons the federal government has long wielded to stop Chinese companies from acquiring US companies and technologies. The most interesting one: The CFIUS order is probably the hardest to understand if you haven’t been following this space closely. While none of these orders are explicitly about China, they are about countering foreign regimes that are both technological competitors and national security threats to the US. There are also reports about more orders on the way. This last one clarifies the scope of the work of the Committee on Foreign Investments in the United States (CFIUS), a body that has existed for over four decades. On August 25, he signed EO 14080 to boost the domestic semiconductor industry last Monday, he signed EO 14081 to build a strong domestic biotechnology industry and reduce reliance on foreign countries then there’s EO 14083, which was officially published in full today.
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